INVESTMENT PROMOTION CENTRE

Law on Investment
Regulation of the Investment Law
Code of Fiscal Benefits

Legislation on
INVESTMENTin Mozambique

General Content
Law on Investment (Law nº 3/93, of 24th June).....................1-17
Regulation of the Investment Law......................................18-52
Code of Fiscal Benefits (Law nº 4/2009, of 12th January)......53-75

Technical Data

TITLE:

Legislation on Investment in Mozambique

EDITOR:

CPI - Investment Promotion Centre
www.cpi.co.mz | cpi@cpi.co.mz

PUBLICATION:

CPI - Investment Promotion Centre

DIRECTOR:

Rafique Jusob Mahomed | rafique@cpi.co.mz

GRAFIC DESIGN & REALIZATION:M GLOBAL Lda
www.mglobal.co.mz | contact@mglobal.co.mz

PHOTOS:

Photograph: M GLOBAL Lda© CPI | © M GLOBALEDITION:

10.000 copies

Law onINVESTMENT

Law nº 3/93, of 24th June

Law on INVESTMENT

Contents
Law nº 3/93, of 24th June .................................................................................. 2
CHAPTER I General Provisions ................................................................. 3
Article 11 - Definitions - ................................................................................ 3
Article 12 - Object of the Law - ..................................................................... 6
Article 13 - Ambit of application - ................................................................. 6
Article 14 - Equality of treatment - ................................................................ 6
Article 15 - Assumption of international agreements - .................................. 7
Article 16 - Basic guiding principle for investments - ................................... 7
Article 17 - Objectives of investments - ........................................................ 7
Article 18 - Forms of direct national investment -.......................................... 8
Article 19 - Forms of direct foreign investment - ........................................... 8
Article 10 - Forms of indirect investment -..................................................... 8
Article 11 - Areas for investments by free private initiative -......................... 9
Article 12 - Areas reserved to public sector initiative - .................................. 91

CHAPTER II Guarantees and Fiscal Incentives ....................................... 9
Article 13 - Protection of property rights - .................................................... 9
Article 14 - Remittance of funds abroad - .................................................... 10
Article 15 - Formalities for remittances abroad - ......................................... 10
Article 16 - Incentives - ............................................................................... 11
CHAPTER III Financing and Exchange Operations .............................. 12
Article 17 - Financing of direct investment - ............................................... 12
Article 18 - Access to domestic credit - ....................................................... 12
Article 19 - Allocation of foreign exchange - .............................................. 12
Article 20 - Exchange Operations - ............................................................. 12
CHAPTER IV Financing and Exchange Operations .............................. 13
Article 21 - Decision making on investment projects - ................................ 13
Article 22 - Registration of direct foreign investment - ............................... 13
Article 23 - Transfer of investors position or rights - ................................. 13
Article 24 - Confirmation and registration of indirect investment - ............ 14
CHAPTER V Other Provisions ................................................................. 15
Article 25 - Resolution of disputes - ............................................................ 15
Article 26 - Protection of the Environment - ............................................... 15
Article 27 - Previous investment projects - .................................................. 16
Article 28 - Regularisation of unregistered foreign investments - ............... 16
Article 29 - Regulations - ............................................................................. 17
Article 30 - Final Provision - ....................................................................... 17

REPUBLIC OF MOZAMBIQUEASSEMBLY OF THE REPUBLIC
Law nº 3/93, of 24th June

PreambleAn awareness of the need to establish a legal framework to regulate the processof carrying out, in Mozambican territory, both national and foreign private
investment undertakings, which can contribute to progress and the improvementof well-being in the country, led to the adoption of Law nº 4/84, on 18th August,and the corresponding Regulations on Direct Foreign Investment, approved by
Decree nº 8/87, of 30th January.
In complement to these, Law nº 5/87 was enacted on the 19th of January, andDecree nº 7/87, of the 30th of January, approved the Regulations on the Procedures
for National Investments. Through Decree nº 10/87, also of the 30th of January,
the tax and customs incentives applicable to private national investments were
established.
The profound changes underway throughout the world in general, and in
Mozambique in particular, especially those arising from the implementation of
the Economic Recovery Programme and the adoption of the new Constitution of
the Republic, together with the need to adopt a more open and objective economic
policy which favours greater participation, complementarity and equality oftreatment of national and foreign investments, have brought about the need torevise the existing legislation regarding investment matters.
In this context, with a view to adequately adjusting and improving the legal
framework on private investment matters in the country, the Assembly of the
Republic, under Section 1 of Article 135 of the Constitution, determines:2CHAPTER I
General Provisions
Article 1(Definitions)
1. For the purposes of this Law, the following definitions shall apply:a) Economic activity  the production and commercialisation of goods or therendering of services of whatever nature, carried out in any sector of thenational economy;b) Foreign capital  the contribution valuable in monetary terms and madeavailable under the investment forms contemplated in Article 9, and inaccordance with the regulatory provisions of this Law, which have beenbrought in from abroad for carrying out investment project(s) in Mozambique;c) Invested capital  the capital effectively paid up and applied in a direct
investment project, whether national or foreign, in accordance with thedefinitions of paragraphs 1m) and 1n) of this Article;

3d) National capital  the sum total of the contribution valuable in monetary
terms under any form of participation in the investment through own equity
capital, shareholder loans, movable or immovable assets and rights
incorporated or to be incorporated in the investment project, in accordancewith the Regulations of this Law;e) Own equity capital  that part or component of direct investment madethrough provision of funds, assets or rights duly evaluated and certified bycompetent authority, belonging to the national or foreign investor and used
for the realization of share capital in the company which will carry out andoperate the investment project;f) Re-exportable invested capital  assets and rights which comprise the direct
foreign investment, under the definition of paragraph 1m) of this Article,
corresponding to the values arising from the liquidation, if the undertaking
is wound up, or to receipts from disposal, or payment of full or partial
compensation, relating to the said assets or rights, after the payment ofapplicable taxes and any due debts and met any other obligations existingor foreseen in the terms of the authorization granted for carrying out theinvestment project;g) Undertaking  activity of an economic nature in which national or foreign
capital has been invested to carry out and operate an authorized investment
project;h) Company  the entity which carries out an economic or business activity,
in an organized and continuous manner, and which is responsible for the
implementation of the investment project and the subsequent operation of
its activities;

i) Franchising  commercial contract through which the franchiser or licensor
supplies and allows, wholly or in part, the use of certain know-how,trademarks, emblems or commercial symbols to another person, with
exclusivity and with or without guarantees of technical assistance andmarketing services, the franchisee or licensee being obliged to make thenecessary investments and agreed periodic payments and to accept control
by the franchiser over the commercial activity undertaken;j) Foreign investor  individual or corporate person bringing to Mozambiquefrom abroad capital and resources belonging to or at the own account andrisk of the said person, with a view of carrying out direct foreign investment
as defined in paragraph 1m) of this Article, in a project under this Law;l) National investor  individual or corporate person who makes available
capital and resources belonging to or at the own account and risk of said
person, with the aim of carrying out direct national investment, as definedin paragraph 1n) of this Article, in a project approved in accordance withthis Law;m) Direct foreign investment  any form of foreign capital contribution valuable
in monetary terms which constitutes own equity capital or resources at theown account and risk of the foreign investor, brought from external sources
and to be used in an investment project for carrying out an economic activity,
through a company registered in Mozambique and operating from
Mozambican territory;n) Direct national investment  any form of contribution of national capitalvaluable in monetary terms which constitutes own equity capital or resourcesat the own account and risk of the national investor destined for use in an
investment project for carrying out an economic activity, through a company
registered in Mozambique and operating from Mozambican territory;o) Indirect investment  any form of investment whose remuneration and/or
repayment does not exclusively consist of the direct participation of its
contributors in the distribution of profits resulting from the operation ofactivities in projects in which the type of investment contemplated in Article
10 has been applied;p) Exportable profits  that part of profits or dividends (net of all operating
costs) resulting from the activity of a project involving direct foreign
investment eligible for the remittance of profits abroad under the provisionsof the Regulations of this Law approved by the Council of Ministers; theinvestor is entitled to effect such remittance abroad at his/her own initiative,
after having provided for the settlement of taxes and any other obligations
due to the Government, any legal deductions for building up or replenishing
the reserve fund, and for the repayment of loans and respective interest
payments and any other obligations with third parties;q) Foreign person  any individual whose nationality is not Mozambican, or,in the case of a corporate person, the company originally formed under thelegislation of another country, or which, having been formed in the Republicof Mozambique under Mozambican laws, has more than 50% (Fifty percent)of the respective share capital held by foreign persons, as provided for inparagraph 2 of this Article;

4r) Mozambican person  any citizen of Mozambican nationality or any company
or institution formed and registered under Mozambican laws, with headquarters
in the Republic of Mozambique, and in which the respective share capitalbelongs at least 50% (Fifty percent) to Mozambican citizens, companies or
institutions, whether private or public;s) Project  an undertaking of an economic activity in which one intends toinvest or has already invested national or foreign capital, or a combinationof both national and foreign capital, and which has been granted the necessary
approval by the competent authority;t) Direct foreign reinvestment  the application in an undertaking of all or partof the profits resulting from the operating activities of any direct foreign
investment project, whether in the same undertaking which generated suchprofits or in other undertakings carried out in the country;u) Direct national reinvestment  the application of all or part of the nonexportable profits resulting from the operating activities of a particularinvestment project, whether in the same undertaking which generated suchprofits or in other undertakings carried out in the country;v) Earnings  any income generated in a given period of operating activity of
an investment project, such as profits, dividends, royalties and other formsof remuneration associated with the concession of rights to access and useof registered technologies and trademarks, as well as the payment of loaninterest and other payments related to direct and indirect investment;5x) Industrial Free Zone  area or unit(s) of industrial activity geographicallydelimited and regulated by a specific customs regime whereby goods therein
which are destined exclusively for export production, including the export
goods produced by such activities, are exempt from any customs duties andrelated taxes or para-fiscal charges and shall also benefit from appropriate
exchange, fiscal and labour regimes especially instituted and designed forthe efficient functioning of the undertakings operating therein, particularly
with regards to their commercial and financial obligations abroad, provided
the expected benefits to Mozambique include the general stimulation ofregional development and the generation of general economic benefits and,in particular, the expansion of productive and commercial capacity, a wider
tax base, the creation of jobs and the generation of foreign exchange;z) Special Economic Zone  area of general economic activity geographicallydelimited and subject to a special customs regime under which all goods
entering, located, circulating, manufactured or transformed therein or exported
therefrom are totally exempt from any customs, duties and fiscal or parafiscal charges, and enjoy, furthermore, a free exchange regime, including
for offshore operations, appropriate fiscal, labour and immigration
arrangements instituted and adequate to the rapid entry and efficient
functioning of enterprises and investors wishing to operate there, in orderto enable the fulfilment of their commercial and financial obligations abroad;provided the country expects to gain from the promotion of regional
development and generation of general economic benefits and, in particular,
the expansion of productive and commercial capacity and tax base, and thecreation of jobs and of foreign exchange.
2. To calculate the percentage participation in the share capital for the determinationof the nationality of the investor, in accordance with the provisions of paragraphs1q) and 1r) of this Article, the origin of the capital shall be determined bysumming-up the shares pertaining, respectively, to the foreign and theMozambican persons.

Article 2(Object of the Law)
1. The present Law seeks to establish the basic and uniform legal framework forthe process of carrying out both national and foreign investments eligible forthe guarantees and incentives provided for in this Law, in the Republic ofMozambique.
2. Those undertakings in which investments are being or have been made withoutcompliance of the provisions of this Law and its Regulations shall not be
eligible to benefit from the guarantees and incentives herein contemplated.

Article 3(Ambit of application)
1. The present Law shall apply to investments of an economic nature carried out
in Mozambique which intend to benefit from the guarantees and incentives
herein established, including those investments carried out in industrial freezones and in special economic zones, and which are in accordance with theprovisions of the Regulations approved as per Article 29 of this Law,
independently of the nationality and the nature of the investor.
2. This Law shall not apply to investments made or to be made in the areas ofprospecting, research and production of petroleum and gas and in mineral
resources extraction industries.
3. The present Law shall neither cover public investments financed by funds fromthe State Budget, nor investments of an exclusively social character.

Article 4(Equality of treatment)
1. In carrying out their activities, foreign investors, employers and workers will
enjoy the same rights and be subject to the same duties and obligations applicableto nationals in accordance with the legislation in force in the Republic ofMozambique.
2. Exception to the provision of paragraph 1 of this Article shall be those casesof projects or activities by nationals which by their nature or scale of investments
and undertakings, may merit special treatment and support from the Government.

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Article 5(Assumption of international agreements)
The provisions of this Law shall not restrict any guarantees, advantages or
obligations specially contemplated in international agreements or treaties to which
the Republic of Mozambique has become a signatory.

Article 6(Basic guiding principle for investments)
Investments covered by this Law, irrespective of the form they may assume,should contribute to the sustainable economic and social development of thecountry, meet the principles and objectives of national economic policy and satisfy
the provisions of this Law and of its Regulations and any other applicable legislation
in force in the country.

Article 7(Objectives of investments)
The carrying out of investments under the present Law shall, inter alia, pursue
the following objectives:

7a) the development, rehabilitation, modernisation or expansion of economic
infrastructures for the operation of productive activities or for rendering
services necessary for supporting productive economic activities andpromoting the countrys development;b) the expansion and improvement of national production capacity or of capacity
to render services which support productive activities;c) contributing towards training, expansion, and development of national
entrepreneurs and Mozambican business partners;d) the creation of jobs for national workers and the raising of professional skill
levels of the Mozambican labour force;e) the promotion of technological development and the improvement ofentrepreneurial productivity and efficiency;f) the increase and diversification of exports;g) the rendering of productive services and of those generating foreign currency;h) the reduction and substitution of imports;i) contributing towards improving the supply of domestic markets and thesatisfaction of the priority and basic needs of the population;j) any direct or indirect contribution towards improving the balance of payments
and government budget revenue.

Article 8(Forms of direct national investment)
Direct national investment may assume any of the following forms valuable inmonetary terms:a) cash;b) infrastructures, equipment and relevant spare parts, materials and othergoods;
c) granting of operating rights over concessions, licences and other rights ofan economic, commercial or technical nature;d) granting, in specific cases and under the terms agreed upon and approvedby competent authorities, of land usage concession rights, patented
technologies or registered trademarks, for which remuneration is limited tothe participation in the distribution of profits resulting from the activity inwhich such rights, technologies or trademarks have been or shall be applied.

Article 9(Forms of direct foreign investment)
Direct foreign investment may consist of any of the following forms valuable inmonetary terms:a) freely convertible currency;b) equipment and relevant spare parts, materials and other imported goods;c) the granting, in specific cases and under the terms agreed upon and approvedby the competent authorities, of concession rights to use patented technologies
or registered trademarks for which remuneration is limited to the participationin the distribution of profits resulting from the activities in which suchtechnologies or trademarks have been or shall be used.

Article 10(Forms of indirect investment)
Except for those cases stated in paragraph b) of Article 8, of paragraph c) of
Articles 9, and of paragraph 2 of Article 17, indirect investment, whether nationalor foreign, shall consist of any or a combination of loans, shareholder loans,
additional supplies of capital, patented technologies, technical processes, industrial
models and secrets, franchising, registered trademarks, technical assistance andother forms of access to the use or transfer of technology and registered trademarks,
and which access to use is under exclusivity or a licensing arrangement restricted
to a geographic zone or to commercial and/or industrial activity area.

8Article 11(Areas for investments by free private initiative)
Areas open to free initiative for private investments shall be all those of economic
activities which are not expressly reserved to the ownership or exclusive operationby the Government or to the investment initiative by public sector.

Article 12(Areas reserved to public sector initiative)
The Council of Ministers shall define the areas of economic activity reserved tothe initiative of public sector for carrying out investments, with or without
participation of the private sector, and, furthermore, define the percentage
shareholding to private national and foreign investment.

CHAPTER II
Guarantees and Fiscal Incentives
Article 13(Protection of property rights)

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1. The Government of Mozambique shall guarantee the security and legal protectionof property on goods and rights, including industrial property rights, comprisedin the approved investments carried out in accordance with this Law and its
Regulations.
2. When deemed absolutely necessary for weighty reasons of national interest or
public health and order, the nationalization or expropriation of goods and rights
comprised in an approved and realised investment under this Law shall beentitled to just and equitable compensation.
3. In the event of any complaint submitted by an investor under the terms regulatedby the Council of Ministers not being resolved within a period of ninety (90)days, and when such fact has led the investor to incur in financial losses on theinvested capital, the said investor shall have the right to a just and equitablecompensation for such losses incurred and which are of evident responsibilityof Government institutions.
4. For the purpose of determining the value of compensation or remuneration to
be paid under paragraphs 1 and 2 of this Article, the evaluation of goods and/or
rights nationalised or expropriated, including financial losses suffered by aninvestor which are of evident responsibility of Government institutions, will
be carried out within ninety (90) days by a team especially appointed or by anauditing company of recognised expertise and competence.
5. The payment of the compensation or remuneration referred to in the preceding
paragraphs of this Article shall take place within ninety (90) days counted fromthe date of acceptance by the competent Government authority. The time forassessment for decision making on the evaluation made and submitted to thecompetent Government authority shall not exceed forty-five (45) days counted
from the date on which the evaluation dossier was submitted and received.

Article 14(Remittance of funds abroad)
1. The Government of Mozambique, in accordance with the conditions set downin the authorisation or other relevant legal instruments to the investment, shallguarantee the remittance of funds abroad in connection with:a) exportable profits resulting from investments eligible for export of profits
under the provisions of the Regulations of this Law;b) royalties or other payments for remuneration of indirect investments associatedto the granting and transfer of technology;c) amortization of loans and payment of interest on loans contracted in theinternational financial market and applied in investment projects in the
country;d) the proceeds of any compensation paid in conformity with the provisionsof paragraph 2 of Article 13;e) invested and re-exportable foreign capital, independently of eligibility (ornot) of the investment project to export profits under the Regulations of thisLaw.
2. The remittances referred to in paragraph 1 above shall comply with the formalities
set down in Article 15 below.

Article 15(Formalities for remittances abroad)
1. In harmony with the definition in paragraph 1p) of Article 1, provided that theapplicable tax obligations and the exchange formalities have been satisfied,foreign investors with approved investments carried out in accordance withthis Law and its Regulations are entitled to transfer abroad up to the wholeamount of the profits accrued to them in each financial year.
2. The document which confirms, for the purpose of remittance of profits abroad,the investment effectively made and the fulfilment of fiscal obligations, shallbe issued by the Ministry of Planning and Finance within thirty (30) days
counted from the date of submission of the relevant application.
3. Remittances of re-exportable capital or of the proceeds of compensation or
remuneration provided for in Article 13 shall be carried out in instalments
timed over a period not exceeding five years and in a such a way as to avoid
disturbing the balance of payments.
4. Remittance of exportable profits and of invested re-exportable capital shall be

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processed in foreign currency of the investors choice in accordance with theprovisions of this Law and its Regulations and the terms of the authorization
granted for the project.
5. Upon compliance with the provisions of paragraphs 1 to 4 of this Article, thetransfer of funds abroad under the present Law and its Regulations shall takeplace, provided that the following have been met:a) the constitution or replenishment of legal reserve fund;b) the payment of any outstanding taxes;c) the provisions necessary to ensure the timely repayment of loan instalments
and interest on loans contracted for the realization of the investment;d) adequate provisions to guarantee the repayment of loan instalments andinterest on loans to fall due before further funds sufficient to meet such
responsibilities are generated.
6. The remittance of exportable profits in each financial year, shall be promptly
processed as long as the positive balance of foreign exchange generated by theundertaking or combination of several undertakings carried out by the sameinvestor or group of associated investors allows the necessary coverage.

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7. In case of insufficient exchange funds to cover the remittance of profits abroadin any given financial year by a project that have not generated a net surplus
of foreign currency, the remaining balance shall be carried forward for its
remittance abroad to the following financial year or years.
8. The transfer abroad of exportable profits generated by foreign investment
which demonstrated the effective substitution and/or reduction of imports orthat proved it has effectively saved foreign exchange for the country, but that
does not have foreign exchange fund to cover such transfer, shall be allowed
and effected under the terms to be agreed with the relevant foreign investor.
9. The remittance abroad of re-exportable invested capital shall be processed withobservance of the provisions of paragraphs 3 and 4 of this Article, proportionately
to the participation of direct foreign investment in the share capital in theundertaking, based on the result value of the liquidation, sale or compensation,
total or partial, of such undertaking or, furthermore, provided that the authorization
period of the direct foreign investment has expired without renewal.

Article 16(Incentives)

1. In addition to the guarantees of ownership and of remittance of funds abroad
provided for in Articles 13 to 15 above, the Government of Mozambique shallalso guarantee the concession of tax and customs incentives granted in the
Code of Fiscal Benefits for investments made in Mozambique in accordancewith this Law and its Regulations.
2. The right to enjoy the incentives provided for in paragraph 1 of this Article
shall be irrevocable throughout the validity of the relevant period contemplated

for in the Code of Fiscal Benefits for investments made in Mozambique, giventhat the conditions upon which the concessions were granted remain unchanged.
3. The Council of Ministers shall approve, by Decree, the Code of Fiscal Benefits
referred to in paragraphs 1 and 2 of this Article.

CHAPTER III
Financing and Exchange Operations
Article 17(Financing of direct investment)
1. Direct investment in projects to be carried out in the country under this Law
and its Regulations shall be financed by own equity capital made available by
the respective investors.
2. Financing made available through shareholders loans and/or additional supplies
of capital made available by the investors own resources, and for which
remuneration shall not bear interest charges made on the undertaking in which
they have been applied, shall also be considered as components of direct
investment.

Article 18(Access to domestic credit)
Companies formed and registered with the participation of direct foreign investment
are entitled to access to domestic credit borrowing on the same terms and conditions
applicable to Mozambican companies and in conformity with the relevant legislation
in force in the country.

Article 19(Allocation of foreign exchange)
1. For those undertakings whose activities generate foreign exchange, the Bankof Mozambique may, upon a submission by the respective companies of theiryearly plan of foreign exchange requirements, authorize the retention, in foreign
currency accounts, of a proportion of the foreign currency revenue generated
by such undertakings.
2. For those cases not covered by the paragraph 1 of this Article, appropriatearrangements shall be adopted for each undertaking taking into account its
economic interest and social importance.

Article 20(Exchange Operations)Exchange operations and the conversion of foreign currency into local currency
and vice-versa shall be processed in accordance with the legislation and rules inforce in the country regarding such matters.

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CHAPTER IV
Approval and Registration
Article 21(Decision making on investment projects)
1. The carrying out, in Mozambique, of investment projects eligible for theguarantees and incentives provided for in this Law shall require approval by
the competent government authorities.
2. The Government will establish, in Regulations, the levels of competence forthe taking of decisions by governmental authorities on investment projects.
3. The Council of Ministers shall regulate the time limits to be observed for thetaking of decisions on investment proposals, and set down the procedures tobe followed when a given proposal has not been decided upon by the competentauthority within the stipulated time limit.
4. The Council of Ministers shall, furthermore, regulate on the situations in which
the authorizations granted for carrying out investment projects may meritchanges or cancellation.

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Article 22(Registration of direct foreign investment)
1. The foreign investor, within one hundred and twenty (120) days counted fromthe date of notification of the decision authorizing an investment project, shallregister the undertaking involving direct foreign investment with the authority
responsible for monitoring the inflow of capital, and register subsequently eachactual capital import operation that takes place.
2. The failure to effect the registrations provided for in this Article may lead tothe non-recognition of the right to export profits and remit the re-exportable
invested capital abroad.
3. The registrations provided for in this Article shall be effected without prejudice
to the verification and confirmation, in accordance with the provisions containedin the Regulations of this Law, of the direct foreign investment amounts declared
for registration.

Article 23(Transfer of investors position or rights)
1. The investor may transfer, wholly or in part, the position or rights held in an
investment or the equity participation held in it, upon an express and duly
founded request made by the investor to the Minister of Planning and Financesubmitted through the Investment Promotion Centre or its provincial delegate.

2. The applicant for such transfer shall indicate, in the request, the identity of therecipient and the terms agreed upon in connection with such transfer ofinvestment rights or position.
3. Where the applicant for the transfer of the position held or part of share capital
held is, in whole or in part, a foreign investor, s/he shall be entitled to request
the remittance abroad of the proceeds from this divestiture, provided the fiscal
obligations applicable to capital gains have been satisfied.
4. The beneficiary of such transfer may only enjoy the guarantees and incentives
provided for in this Law if such operation has been approved, effected andregistered in accordance with the provisions of Article 22, and during the periodof validity of the authorization granted for the relevant undertaking.

Article 24(Confirmation and registration of indirect investment)
1. The realisation of any indirect foreign investment contemplated in this Law
and its Regulations shall require previous confirmation from the competentauthority.
2. For the purpose of the paragraph 1 of this Article, the competent authority shallbe:a) the Bank of Mozambique, for those components of investments made under
the form of loans associated with direct investments, irrespective of any
involvement of direct foreign investment.
b) the authority responsible, in conformity with the law, for the registration of
any other specific form of indirect foreign investment brought in from outside
Mozambique or from any other comparable source.
3. The necessary condition for any form of foreign investment covered by Article
10 to be considered as indirect investment applied in a project in accordancewith this Law and its Regulations, shall be that such investment is confirmed
and registered with the competent Mozambican authority as provided for inparagraph 2 of this Article.

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CHAPTER V
Other Provisions

Article 25(Resolution of disputes)
1. Any disputes arising from the interpretation and application of this Law and
its Regulations, which cannot be resolved on a friendly basis or by means ofnegotiation, may be submitted to the competent judicial authorities, in accordancewith Mozambican legislation, for their resolution.
2. Disputes between the Government of Mozambique and foreign investors
concerning authorised and realised investments in the country, which cannot
be resolved on the basis provided for in paragraph 1 of this Article, shall, unlessotherwise agreed, be entitled to submission for resolution through arbitration,with possible recourse, upon express agreement of both parties, to:15a) the rules of the International Convention for the Settlement of Investment
Disputes between States and Nationals of other States (ICSID) adopted in
Washington on 15th March 1965, or through the International Centre for
the Settlement of Investment Disputes between States and Nationals of otherStates;b) rules set out in the ICSID Additional Facility adopted on the 27th September
1978 by the Administrative Council of the International Centre for Settlementof Investment Disputes between States and Nationals of other States,whenever the foreign investor does not meet the requirements provided forin Article 25 of the ICSID Convention;c) rules of arbitration of the International Chamber of Commerce based in
Paris.

Article 26(Protection of the Environment)
1. Investors, and subsequently their companies, shall, in the process of elaboration,
implementation and operation of their investment projects, carry out and submit
the relevant studies and evaluations of the environmental impact and of any
pollution and sanitation concerns that may result from their activities and thedamages and/or wastes of their undertakings. Such studies and evaluations
shall include any potential effects and/or implications on forest, geological andhydrological resources, whether within their area of concession or close to theperipheries of the areas in which the undertaking is being or is to be implemented
and operated.

2. It shall also be the responsibility of said investors and companies to undertake
appropriate measures for the prevention and minimisation of any negativeenvironmental effects, particularly those identified in the environmental impact
studies referred to in paragraph 1 of this Article, and subject to observance ofthe rules and guidelines issued by the competent authorities in this field, andin conformity with any legal provisions and any terms specified in the licencegranted for the operation of the activity.
3. Those activities with levels of pollution and contamination likely to alter andnegatively affect the environment or public health shall comply with restrictions
established by law and/or issued by competent authorities, as well as to any
rules or international agreements on such issues to which Mozambique has
become a signatory.

Article 27(Previous investment projects)
1. This Law and its Regulations shall not apply to investments made before it hasentered into force, which shall continue to be governed by the provisions of
the legislation and by the specific terms or contracts under which the authorisationfor each particular investment project to be carried out, in Mozambique, wasgranted.
2. Investment proposals submitted for evaluation and approval before the entry
into force of this Law shall be evaluated and decided upon, as appropriate,under the Law nº 4/84, of 18th August, or of the Law nº 5/87, of 19th January,
unless the applicants opt for and expressly request that the present Law be
applied.

Article 28(Regularisation of unregistered foreign investments)
1. Investors with projects involving direct foreign investment authorised underLaw nº 4/84, of 18th August, and the Regulations on Direct Foreign Investment,
which are currently under implementation, in the relevant authorization or theirimplementation to be commenced, but which have not yet been registered inaccordance with the provisions of Article 22, shall provide for and effect suchregistration with the Ministry of Planning and Finance within a period of one
hundred and eighty (180) days counted from the date on which the present
Law has entered into force.
2. The non-observance of the provision stipulated in paragraph 1 of this Article
may lead to the cancellation of the granted authorization and, consequently,
to the cessation of the recognition and commitments that had been assumed
by the Government of Mozambique in relation to such investments under Law
nº 4/84, of 18th August, and its Regulation.

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Article 29(Regulations)
The Council of Ministers shall approve the Regulations relevant to the present
Law.

Article 30(Final Provision)
Those provisions of Law nº4/84, of 18th August, and of Law nº 5/87, of 19th
January, to the extent that they are contradictory to the provisions of the present
Law, are hereby revoked.

Approved by the Assembly of the Republic.
PRESIDENT OF THE ASSEMBLY
Marcelino dos Santos
Published on the 24th June, 1993.

17

PRESIDENT OF THE REPUBLIC
Joaquim Alberto Chissano

Regulation of the
INVESTMENT Law

Approved by Decree nº 43/2009, of 21st AugustContents
Decree n° 43/2009, of 21 August.......................................................................... 21

Regulation of the Investment Law ..................................................................... 23
CHAPTER I General Provisions........................................................................ 23
Article 1 - Definitions - ........................................................................................ 23
Article 2 - Scope of Application - ..........................................................................25
Article 3 - Objective - ............................................................................................25
CHAPTER II Coordination of investment procedures.................................... 26
Article 4 - Competency for the coordination of investments - ............................. 26
Article 5 - Assistance and monitoring - .............................................................. 26
CHAPTER III Foreign direct investment & forms of investment.................... 27
Article 6 - Minimum value of foreign direct investment - .................................... 27
Article 7 - Determination of the value of foreign direct investment - ....................27
CHAPTER IV Processing of investment proposals.......................................... 28
SECTION I Submission of proposals..................................................................28
Article 8 - Submission of the investment project proposal - ................................ 28
Article 9 - Project proposal supporting documentation - ...................................... 28
SECTION II Analysis of the proposal ........................................................................29
Article 10 - Inter-institutional coordination - .............................................................29
Article 11 - Authorisation proposal of the project - ................................................ 29
CHAPTER V Project authorisation competencies and time periods ..............30
Article 12 - Competency for investment project decisions - ...................................30
Article 13 - Notification of the decision - ................................................................31
Article 14 - Project implementation commencement - .............................................31
Article 15 - Registration of the foreign direct investment - .....................................31
Article 16 - Foreign investor status - .......................................................................31
CHAPTER VI Project authorisation amendment & revocation......................32
Article 17 - Amendment of the terms of authorisation - ......................................... 32
Article 18 - Transfer of the position of the investor - ............................................. 32
Article 19 - Revocation of the investment authorisation - ..................................... 32
CHAPTER VII Special Economic Zones............................................................33
SECTION I Creation of ZEE ........................................................................... 33
Article 20 - Competencies - .................................................................................... 33
Article 21 - Authorised activities - ............................................................................33
Article 22 - Concession of land - ........................................................................... 33
Article 23 - Environmental impact assessment - .................................................... 34

SECTION II Special regimes ..............................................................................35
Subsection I Fiscal and customs regimes.................................................................35
Article 24 - Fiscal and customs regime - ...................................................................35
Article 25 - Sales into the local market - ................................................................ 35
Article 26 - ZEE imports and exports - .................................................................. 36
Article 27 - Local suppliers - .................................................................................. 36
Subsection II Employment regime..................................................................... 36
Article 28 - Employment regime - ......................................................................... 36
Article 29 - Information regarding foreign employees - ........................................ 37
Article 30 - Start of work by foreign employees - .................................................. 37
Article 31 - Foreign employee registration procedures - ........................................ 37
Subsection III Immigration ................................................................................ 38
Article 32 - Immigration regime - ............................................................................ 38
Subsection IV Foreign Exchange regime........................................................... 38
Article 33 - Foreign Exchange regime - ................................................................. 38
Article 34 - External transfers of funds - ................................................................ 39
Article 35 - Financing - .......................................................................................... 39
SECTION III Licensing procedures ...................................................................39
Subsection I OZEE licensing................................................................................39
Article 36 - OZEE licensing proposal - .................................................................. 39
Article 37 - Nature of the licences - .......................................................................... 40
Article 38 - ZEE Management - ............................................................................ 40
Subsection II EZEE approval and licensing .....................................................41
Article 39 - Approval de EZEE - ............................................................................ 41
Article 40 - Application for EZEE licensing & certification - ............................... 41
Article 41 - EZEE certification competency and timing - ...................................... 41
SECTION IV Integrated Tourism Establishment Zones..................................42
Subsection I Creation..............................................................................................42
Article 42 - Creation of ZETIs -.............................................................................. 42
Article 43 - Nature of the licences - ....................................................................... 42
Article 44 - Regime applicable to ZETIs - ............................................................. 43
Subsection II ZETI developers........................................................................... 43
Article 45 - Certificação de OZETI - ..................................................................... 43
Article 46 - Regime applicable to OZETIs - .......................................................... 43
Subsection III ZETI companies ........................................................................ 43
Article 47 - Legal nature of EZETIs - .................................................................... 43

Article 48 - EZETI Certification - .......................................................................... 44
Article 49 - Regime applicable to EZETIs - ........................................................... 45
SECTION V Inspections..................................................................................... 45
Article 50 - Periodic inspections - ......................................................................... 45
SECTION VI Sales.............................................................................................. 46
Article 51 - Sales and transfers of merchandise and goods - ................................. 46
Article 52 - Sales of goods, improvements and provision of services - ................. 46
CHAPTER VIII Industrial Free Zones...............................................................46
SECTION I Creation of an IFZ ...................................................................... 46
Article 53 - Competencies - ................................................................................... 46
Article 54 - Processing of the application - ............................................................ 47
Article 55 - OZFI Certificate - .............................................................................. 47
Article 56 - EZFI licence application - ................................................................... 47
Article 57 - Competency for licensing - ................................................................. 47
Article 58 - Inspections - ........................................................................................ 48
SECTION II ........................................................................................................ 48
Article 59 - Authorised activities - ......................................................................... 48
Article 60 - Periodic inspections - .......................................................................... 49
Article 61 - Companies located outside of an IFZ - ............................................... 49
Article 62 - Time period for installation - .............................................................. 49
SECTION III Special regimes ........................................................................... 49
Article 63 - .............................................................................................................. 49
Article 64 - Contracting of foreign employees - .................................................... 50
SECTION IV Customs and fiscal regime.......................................................... 50
Article 65 - Sales into the local market - ................................................................ 50
Article 66 - Imports and exports das IFZ - ........................................................... 50
Article 67 - Local suppliers - .................................................................................. 51
Article 68 - Sale and transfer of merchandises and goods within an IFZ - ............ 51
CHAPTER IX Final and transitory provisions....................................................51
Article 69 - Transitory regime - .............................................................................. 51
Article 70 - Communications and correspondence - .............................................. 51
Article 71 - Claims - ............................................................................................... 52
Article 72 - Existing IFZ companies - .................................................................... 52
Article 73 - Existing companies operating within the geographical area of a ZEE - ..... 52

REPUBLIC OF MOÇAMBIQUE
COUNCIL OF MINISTERS
Decree n° 43/2009,of 21 August
It being necessary to promote the continued improvement of the national investment
climate in line with Mozambique's current socio-economic conditions, in particularwith regard to the speedy execution of investment projects, the Council of Ministers,
pursuant to the provisions of Article 204.1(f) and 204.2(d) of the Constitution of
the Republic of Moçambique together with Article 29 of Law 3/93 of 24 June,decrees:

Article 1
The Investment Law (Law 3/93 of 24 June) Regulations, incorporated as part ofthis Decree, are approved.

Article 2
The Ministers with responsibility for Planning and Development, Finance, Labour,
Home Affairs and Environment have the authority to establish, in consultation
with the Investment Council, the supplementary procedures for the operation ofSpecial Economic Zones and Industrial Free Zones.

Article 3
The Minister with responsibility for Planning and Development has the authority
to approve the application, licence and certificate forms as well as the procedural
measures that are necessary for the implementation of this decree.

Article 4
Articles 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23,
24, 25 and 26 of the Investment Law Regulations approved by Decree 14/93, of
21 July**, Decree 36/95, of 8 August, Decree 62/99, of 21 September, Decree
35/2000, of 17 October and other legislation which is contradicted by the provisionsof this decree.

Approved by the Council of Ministers.
Let it be published.
THE PRIME MINISTERLUÍSA DIAS DIOGO

Footnote:** Article 4 of the Investment Law Regulations approved by Decree 14/93, which is
the only provision not revoked by this Decree, established the Investment Promotion
Centre (CPI). Article 4 reads as follows:
1. The Investment Promotion Centre (CPI) is hereby created in order
to assist the Minister of Planning and Finance and to ensure theimplementation of the provisions of Law 3/93, of 24 June, and theseRegulations, through the coordination, promotion, analysis, followup and verification of investments carried out under the aforesaid
legislation.
2. The Investment Promotion Centre is directly subordinated to the
Minister of Planning and Finance and shall be governed by its own
charter as approved by the Council of Ministers.

REGULATION OF THE INVESTMENT LAW

CHAPTER I
General Provisions
Article 1(Definitions)
For purposes of these Regulations, the following terms have the indicated meaning:a) Economic activity - the production and sale of goods or the supply of services,
regardless of the nature of the goods or services, carried out in any sector of
the national economy;b) ZEE or IFZ Developer Certificate - the document issued by GAZEDA under
the terms of these Regulations that lists the specific licences that have beenauthorised, entitling the titleholder to operate a ZEE or an IFZ and constituting
sufficient title for the commencement of the respective activity;c) ZEE or IFZ Company Certificate - the document issued by GAZEDA under
the terms of these Regulations that lists the licences that have been authorised,
entitling the titleholder to undertake within a ZEE or an IFZ the activities forwhich it has been licensed and constituting sufficient title for the commencementof operations;d) Investment Council - the body within the Council of Ministers which is
responsible for the submission of proposals for national investment policies;e) Investment Promotion Centre, referred to by the abbreviation CPI - a bodyof the Mozambican State Apparatus with responsibility for the promotion,
reception, analysis, monitoring and verification of investments carried out inMozambique with the exclusion of ZEEs and IFZs.
f) Undertaking - an activity of an economic nature in which national and/ or
foreign capital has been invested and for which the necessary authorisation for
its realisation and operation has been issued;g) Project Implementing Company - an entity that carries out an economic
activity in an organised and continuous fashion and that is responsible for the
implementation of an investment project and for the subsequent operation of
the respective economic activity;h) ZEE or IFZ Company, referred to by the abbreviation "EZEE" or "EZFI"a legal entity duly registered in Moçambique to which an EZEE or EZFI
Certificate has been issued in accordance with these Regulations;i) Integrated Tourism Establishment Zone Company, referred to by theabbreviation "EZETI" - a legal entity duly registered in Moçambique towhich an EZETI Certificate has been issued in accordance with the respective
applicable regime and these Regulations;j) Export from a ZEE or IFZ - export of goods or services from a ZEE or
IFZ to outside of the respective customs territoryk) Export into a ZEE or IFZ - export of goods or services into a ZEE or
IFZ from the Mozambican national customs territory;l) Local Supplier - a company headquartered in the national customs territorythat supplies goods or services to an OZEE or IFZ, or to an EZEE or EZFI;m)Office for Accelerated Economic Development Zones - referred to by theabbreviation "GAZEDA" - a State body that has been given the authority
to coordinate all activities with regard to the establishment, development
and management of Special Economic Zones and Industrial Free Zones;n) Import from a ZEE or IFZ - entry into the Mozambican national customs
territory of industrial goods and services that come from a ZEE or IFZ;o) Import into a ZEE or IFZ - entry into a ZEE or IFZ of goods that comefrom outside of the respective customs territory;p) Foreign direct investment - any form of foreign sourced capital contributionthat is quantifiable in monetary terms, is sourced from a foreign investor's
own equity capital or other resources and/or from capital or resources thatare for the account and risk of the foreign investor and is to be invested
in an economic activity project through a company registered and operating
in Moçambique;q) ZEE or IFZ Developer, referred to by the abbreviation "OZEE" or "OZFI"- a legal entity, duly registered in Moçambique, who, in accordance withthe terms of these Regulations, has been granted an OZEE or OZFI Certificate;r) Integrated Tourism Establishment Zone Developer, referred to by theabbreviation "OZETI" - a legal entity that is duly registered in Moçambiqueand that has been granted an OZETI Certificate, in accordance with theterms of the applicable regime and these Regulations;s) Project - an economic activity undertaking in which national or foreign
capital or a combination of national and foreign capital is to be or has
been invested and that has been granted the necessary authorisation by
the competent authority;t) Special Economic Zone, referred to by the abbreviation "ZEE" - as definedin Article 1(z) of Law 3/93 of 24 June.
u) Industrial Free Zone, referred to by the abbreviation "IFZ" - as definedin Article 1(x) of Law 3/93 of 24 June.

v) Integrated Tourism Establishment Zone, referred to by the abbreviation"ZETI" - a Special Economic Tourism Zone as defined in its respective
legislation, in which the provision of tourism services is the principal economic
activity.

Article 2(Scope of Application)
1. The provisions of these Regulations apply to private national and foreign
investment carried out by individuals or duly incorporated companies and otherlegal entities pursuant to Law 3/93 of 24 June (Investment Law) and otherlegislation.
2. The investments referred to in this Article, even if not eligible for the fiscal
incentives defined in the respective legislation, may benefit from the guaranteeof the right to export profits and re-export invested capital.

Article 3(Objective)
The objectives of these Regulations are:a) To define the competencies, acts and time periods to be observed in the making
of decisions regarding investment projects;b) To set the minimum value and forms of foreign direct investment in economic
undertakings;c) To establish the submission and decision-making procedures for investment
projects that are eligible for the guarantees and incentives provided for underthe Investment Law;d) To establish the rules for the determination of the actual value of the realised
investment;e) To define the rules for the amendment and revocation of investment authorisations
that have been granted;f) To establish the legal framework and the mechanisms for the integration,
coordination, planning, implementation and monitoring of the operations of
the Special Economic Zones and the Industrial Free Zones;g) To define the rules for notification and correspondence as well as for the
resolution of complaints regarding investment projects.

CHAPTER II
Coordination of investment procedures
Article 4(Competency for the coordination of investments)
1. The Minister who has oversight of Planning and Development affairs has thecompetency to coordinate the investment process in accordance with the termsof Law 3/93, of 24 June.
2. CPI and GAZEDA shall each have the competency, within their respective
areas of operation and in accordance with Government policies and strategies,
to promote the economic opportunities that exist in Moçambique and to ensurethat there are appropriate procedures to receive, assist and implement projects
in accordance with the terms of the Investment Law and other applicablelegislation.
3. When requested by CPI or GAZEDA, the Ministers, Provincial Governors andother heads of State institutions as well as the Presidents of Municipal Councils
shall appoint representatives to ensure the necessary inter-institutional
coordination.
4. The representatives appointed under the terms of this Article are responsible
for the issuance of the advisory opinions and authorisations that are necessary
for the approval, implementation and realisation of investment projects.

Article 5(Assistance and monitoring)
1. CPI and GAZEDA are responsible for the provision of institutional assistanceto investors during the implementation and actual execution phase of projects
that have been authorised, as well as for the monitoring and verification ofcompliance with the project Terms of Authorisation, the provisions of theInvestment Law and other applicable legislation.
2. The assistance and monitoring provided by CPI and GAZEDA are without
prejudice to the specific competencies of the respective sectors of activity andother entities that supervise the area of activity of the particular project.
3. The investors and their representatives shall cooperate with the officials
designated by the entities responsible for the monitoring of projects and shallprovide such information and documentation as requested for this purpose.

CHAPTER III
Foreign direct investment & forms of investment
Article 6(Minimum value of foreign direct investment)
1. For the specific purposes of eligibility for external remittance of profits andre-export of invested capital, the minimum value of foreign direct investmentusing the equity capital of a foreign investor is set at two million five hundred
thousand Meticals (2,500,000.00Mts).
2. The foreign investor whose investment project satisfies one of the following
requirements is also eligible for the external remittance of profits and the reexport of invested capital:a) Generates an annual sales volume that is not less than three times theamount fixed in the preceding clause 6.1 as from the third year ofoperations;b) Registers annual exports of goods or services with a value equivalent
to one million five hundred thousand Meticals (1,500,000.00Mts);c) Creates and maintains from the second year of operations at least twenty
five direct employment positions for Mozambican nationals who are
registered with the social security system.
3. The Minister who has responsibility for Planning and Development affairs
shall, by ministerial order (Despacho) and after consultation with the Ministerof Finances and the Governor of the Bank of Moçambique, adjust the minimum
value of foreign direct investment, taking into consideration the average rateof inflation for the respective period in review.

Article 7(Determination of the value of foreign direct investment)
1. For the purpose of registration and eligibility for the investment guarantees
and incentives established for this purpose, the actual value of the realised
foreign direct investment shall be equal to the sum of the amounts of equity
capital including shareholder loans without interest and the additional capital
contributions by the investors themselves as well as re-exportable profits thatare reinvested in Moçambique.
2. The realization of foreign direct investment using re-exportable profits is subject
to the prior confirmation by the Bank of Moçambique of the amount of funds
actually invested including confirmation that the minimum amount referred toin Article 6.1 of these Regulations has been invested.
3. For the purposes of the provisions of this Article, if the foreign direct investment

results from the import of equipment, machinery and other materials,
the CIF value of the imports shall be considered to be the respective
amount of investment.

CHAPTER IV
Processing of investment proposals
SECTION I
Submission of proposals
Article 8(Apresentação da proposta de projecto de investimento)
1. An investment project proposal shall include the duly filled in form accompaniedby the documents necessary for the review of the proposal and shall be submitted
in quadruplicate to CPI or GAZEDA, as the case may be, which shall registerthe proposal after confirming compliance with requirements for proposals.
2. An investment project proposal may be submitted in either the English or
Portuguese language.
3. A project proposal that is submitted electronically or by mail shall be registeredand processed provided that the proposal contains the information and elementsthat are necessary for its analysis and decision.
4. The project shall be registered in the name of the implementing company or
the corporate name reserved for this purpose. The registration shall include thename of the proponent investors' legal representative or mandatary who shallguarantee the liaison with CPI or GAZEDA.

Article 9(Project proposal supporting documentation)
1. Investment project proposals that are submitted for analysis and approval shallbe accompanied by the following documents:a) Copy of the identification document of each proponent investor;b) Certificate of company registration or company name reservation
certificate for the Project Implementing Company;c) Topographic plan or drawing of the proposed location for
implementation of the project.
2. In the case of projects to be executed by a local business representation (branch)of a foreign entity, a copy of the Commercial Representation Licence issued

by the competent Mozambican authority shall also be submitted in addition
to the documents listed in clause 1 of this Article 9.
3. During the analysis of the project proposal and consistent with the characteristics
and size of the undertaking, additional or supplementary information may berequested as may be relevant for the review of the project.

SECTION II
Analysis of the proposal
Article 10(Inter-institutional coordination)
1. CPI and GAZEDA have seven (07) business days, counting from the date of
the reception of the project proposal, to undertake the necessary inter-institutional
consultation with the Ministries that have regulatory oversight of the sector
that applies to the project as well as with other State institutions for the purposeof securing the opinions and approval regarding the project proposal.
2. Where there is no response within five (5) business days counting from thedate of submission of the project by the entity having regulatory oversight ofthe sector, a favourable opinion and tacit approval of the project implementation
shall be deemed to have been given for all purposes.

Article 11(Proposta de autorização do projecto)
1. The authorisation proposal shall include the draft ministerial order (Despacho)or Council of Ministers Internal Resolution containing the specific terms of
the authorisation relating to the respective project.
2. The project terms of authorisation shall include, inter alia, the following
information:a) identification of the proponent investors;b) the project designation and objectives;c) the name of the implementing company;d) the location and scope of operations;e) the value and structuring of the investment;f) the investment incentives and guarantees;g) the number of national and foreign persons to be employed;h) the time limit and terms for the start of the implementation of the project;i) other specific terms to be included in the authorisation that are relevant
given the characteristics of the project.

CHAPTER V
Project authorisation competencies and time periods
Article 12(Competency for investment project decisions)
1. The decision regarding the approval of an investment project received by CPI
shall be made by:a) the Governor of the Province, within a maximum period of three (3)business days after the receipt of each proposal, in respect of national
investment projects with an investment value not greater than the equivalentof one billion five hundred million Meticals (1,500,000,000.00Mts);b) the General Director of CPI, within a maximum period of three (3)business days after the receipt of each proposal, in respect of foreignand/or national investment projects with an investment value not greaterthan the equivalent of two billion five hundred million Meticals(2,500,000,000.00Mts);c) the Minister with oversight of Planning and Development matters, withina maximum period of three (3) business days after the receipt of each
proposal, in respect of foreign and/or national investment projects withan investment value not greater than the equivalent of thirteen billion
five hundred million Meticals (13,500,000,000.00Mts);d) the Council of Ministers, within a maximum period of thirty (30) businessdays after the receipt of each proposal, for:i) investment projects with an investment value greater than the equivalentof thirteen billion five hundred million Meticals(13,500,000,000.00Mts);ii) investment projects that require a land area greater than ten thousand
hectares, to be used for any purpose except for the purpose specified
in the following clause 1(d)(iii);
iii)investment projects that require a forestry concession area greaterthan one hundred thousand hectares;iv)any other projects that have foreseeable political, social, economic,
financial or environmental impacts that by their nature should be
reviewed and decided by the Council of Ministers, on the proposalof the Minister who has oversight of Planning and Development
matters.
2. The General Director of GAZEDA has the competency to approve ZEE andIFZ regime investment projects within a maximum period of three (3) businessdays after the receipt of each proposal.
3. Taking into account the complexity or political, social or economic implications,
the General Directors of CPI and GAZEDA may submit investment project
proposals within their respective limits of authority for consideration by the
Minister who has oversight of Planning and Development matters.

Article 13(Notification of the decision)
1. CPI or GAZEDA, as the case may be, shall have the duty to notify the proponents
of investment projects of the decision taken in respect of the proposal withina maximum period of forty-eight hours of the date of the decision.
2. A proponent whose investment proposal has been rejected, may, if it wishes,reformulate and resubmit the proposal for reconsideration of the decision taken.

Article 14(Project implementation commencement)
1. The implementation of a project that has been authorised shall be commenced
within a maximum period of one hundred and twenty (120) days counting fromthe date of notification of the authorisation to the project proponents, unlessa different time period is fixed in the authorisation.
2. For the purposes of these Regulations, the commencement of the implementationof a project is defined as the taking of actions that unequivocally tend to theeffective realisation of the undertaking that is the subject of the authorisation.

Article 15(Registration of the foreign direct investment)
1. The foreign investor shall register the foreign direct investment with the Bankof Moçambique, within a period of ninety days after the authorisation of the
project and shall, for this purpose, submit the deposit receipts (bordereaux)issued by the respective national banking institutions or the documents confirmedby the customs authorities according to the nature or form of the respective
investment.
2. The transfers of funds by means other than the national banking system shallnot qualify as authorised foreign direct investment that is part of the investment
project.
3. Any payments made abroad shall not qualify as foreign direct investment unlessdocumentary proof of the entry into Mozambique of goods that have acorresponding value is submitted.

Article 16(Foreign investor status)
For the purpose of the export of profits and the re-export of invested capital, thestatus of a foreign investor shall be valid so long as the underlying terms andconditions that qualified the investor for the acquisition of this status remain
unaltered.

CHAPTER VI
Project authorisation amendment & revocation
Article 17(Amendment of the terms of authorisation)
1. When material circumstances so require and based on the duly documented
express application of the respective investors or their representatives, the terms
and conditions of the project may be amended by the competent authority.
2. Requests for amendment regarding the increase of the amount of investment
and transfer of the position or right of the investor in projects authorized by
the Council of Ministers shall be submitted to the Minister with oversight ofPlanning and Development matters.

Article 18(Transfer of the position of the investor)
1. The transfer or assignment of shareholdings held by investors in investment
projects is unrestricted provided that the transfer takes place within Mozambiqueand is communicated to the entity that authorised the project and documentary
proof of compliance with tax obligations is submitted.
2. The registration of a transferee as a project investor shall be formalised on
submission of the respective request together with documentary proof of
payment of any tax due issued by the competent authority and evidence thatthe transaction was carried out in accordance with the terms of the Law.
3. Any transaction executed abroad or the payment in respect of which has notbeen made through the national banking system shall be without effect within
the national territory.

Article 19(Revocation of the investment authorisation)
The entity that granted the original investment authorisation has the competency
to revoke the respective investment authorisation on the occurrence of any of thefollowing:a) the justified request of the investors;b) the expiry of the time period established for the start of the implementation of
the project, without the project implementation having been commenced;c) the paralisation of the undertaking's implementation or operation for a continuous
period greater than three (3) months without prior communication to thecompetent authority that had authorised the project;d) the verification of events of default under the provisions of Law 3/93, of 24
June, and these Regulations, or the terms provided in the respective authorisation
or in other applicable legal instruments.

CHAPTER VII
Special Economic Zones
SECTION I
Creation of ZEE
Article 20(Competencies)
1. All types of economic activities are eligible for the respective ZEE benefits
except those that by their nature are not permitted by law.
2. The construction and development of basic infrastructure for the implantationof a ZEE is also eligible for the ZEE benefits that apply to the activities to be
carried out in the ZEE.

Article 21(Authorised activities)
1. All types of economic activities are eligible for the respective ZEE benefits
except those that by their nature are not permitted by law.
2. The construction and development of basic infrastructure for the implantationof a ZEE is also eligible for the ZEE benefits that apply to the activities to be
carried out in the ZEE.

Article 22(Concession of land )1. The concession of the right of land use and benefit to an OZEE and to ZEE
companies is subject to the terms of the Land Law and respective regulations.
GAZEDA shall ensure the institutional coordination for the issuance of theauthorisations, as well as the renewals and transfers of the land use and benefit
right or any Special Licences.
2. Without prejudice to the provisions of the specialised legislation, the renewalof the land use and benefit right as well as the issuance of a new land use andbenefit title for the same area to the same investor at the end of the period of
renewal only requires the proof of fulfilment of the approved project.

3. Without prejudice to the provisions of specialised legislation, the application
for the grant and renewal of land use and benefit rights shall, once the applicablelegal requirements are completed, be decided within the maximum period ofthirty (30) days.

Article 23(Environmental impact assessment)
1. Once the creation of a ZEE is authorised, the entity that has oversight ofenvironmental matters shall, in collaboration with GAZEDA, undertake theenvironmental assessment of the ZEE area and the activities that may be carriedout in the ZEE area as part of the respective projects or proposals as well as
the basic environmental measures to be observed.
2. The assessment referred to in the preceding clause 23.1 shall also indicate
which activities are exempt from environmental impact assessment.
3. The activities not included in the list referred to in the preceding clause 23.2
may be exempted from the conduct of an environmental impact study provided
that the conduct of the activities does not violate the maximum effluent
emission limits set in specific legislation or other restrictions that are fromtime to time applicable to the activity in question.
4. GAZEDA, in coordination with the Ministry with oversight of environmental
matters, shall adopt a set of measures and procedures that enable the swift
issuance of environmental licences for projects to be implanted in ZEEs.
5. The issuance of an environmental licence for any project that is susceptible ofprovoking significant environmental damage in a ZEE, or in any other areas
subject to these Regulations, is a prerequisite to the issuance of any otherlicences.

SECTION II
Special regimes
Subsection I
Fiscal and customs regimes
Article 24(Fiscal and Customs Regime)
1. The developers and companies that carry out activities under the ZEE regime
are subject to tax in accordance with the applicable law.
2. The entry into a ZEE of merchandise of any nature, quantity, provenance ororigin is permitted provided that its import is not prohibited by law.
3. The fiscal and customs benefits that are applicable to the merchandise referred
to in the preceding clause 24.2 are set out in respective legislation.

Article 25(Sales into the local market)
1. An EZEE is authorised to sell its products into the local domestic market,
subject to payment of the tax on the value of the imported goods, including
customs duties, VAT (Valued Added Tax) and excise tax (Special ConsumptionTax), applicable under the legislation then in force.
2. For those cases in which certain goods and products benefit from the exemption
or lower rates of customs duties under the terms of bilateral or regional
agreements that are lower than the rates referred to in clause 1 of this Article,
these rates shall be taken into consideration in respect of sales of similar ZEE
produced goods into the internal domestic market.
3. The rules regarding the origin of goods shall not be applied to the applicationof the preceding clause 25.2.
4. ZEE companies, which import consumer goods and merchandise, may sell
these products into the local domestic market subject to the payment of all
applicable fiscal imposts. The provisions of the preceding clauses 25.2 and25.3 shall not apply to the sales of these products.
5. The provisions of this Article do not apply to the imports and sales, including
the respective added value, destined for or coming from the economic activities
carried out in a ZETI.

35

Article 26(ZEE imports and exports)
1. The import of raw materials, merchandise and equipment into a ZEE shall be
brought into Moçambique through the customs posts at the ports, airports or
terrestrial frontiers, and thence directly under the customs transit regime to the
ZEE where the goods may be inspected.
2. Provided that the import of such goods is not prohibited by law, merchandiseof any nature, quantity, provenance or origin may be imported into a ZEE.
3. To carry out the imports as provided in the preceding clauses 26.1 and 26.2,
the importer, namely the EZEE and the OZEE, shall submit the following
documents:a) Single Customs Form (Document Único / DU);b) Commercial invoices and the respective detailed list of merchandise;c) Bill of loading (Conhecimento de Embarque), Notice of arrival (Aviso
de Chegada), Airway Bill (Carta de Porte Aéreo), Merchandise
Circulation Permit (Guia de Circulação de Merchandises - Memorando),
according to whether maritime, rail, air or road transport is used.

36

4. The provisions of the preceding clause 26.3 shall not prevent import interdictions
or restrictions based on either questions of morality, public order and security
or treaties or resolutions of international organisation ratified by the Republicof Moçambique.

Article 27(Local suppliers)
The sale of goods and services into a ZEE by local domestic suppliers is considered
to be an export.

Subsection II
Employment regime
Article 28(Employment regime)
1. All of the legal instruments that govern dependent work shall apply to ZEEs
and EZEEs, except for any exceptions set out in this decree and other specificlegislation.
2. The contracting of foreign employees for the conduct of activities in a ZEE ispermitted.

Article 29(Information regarding foreign employees)
1. The OZEE and the EZEE shall notify the competent authorities through
GAZEDA of the contracting of foreign employees.
2. Foreign employees with the professional qualifications and specialisations that
Mozambique requires may be hired provided that there are no, or insufficientnumbers of, Mozambican nationals with the required qualifications.
3. Failure to comply with the provisions of the preceding clause 29.2 shall resultin the commencement of a proceeding to determine compliance conducted by
the competent authorities in coordination with GAZEDA, and which could
result in the application of sanctions provided for by law.

Article 30(Start of work by foreign employees)
1. Foreign employees may begin working prior to the issuance of the competentauthorisation, provided that the authorisation is applied for within the time
period indicated in the following clause 30.2
2. Recourse to the measure provided for in the preceding clause 30.1 requires theemployer to give notice channelled through GAZEDA to the competent labour
administration authority of the contracting of the foreign employee within amaximum period of fifteen (15) days counting from the date of thecommencement of work by the foreign employee.

Article 31(Foreign employee registration procedures)
1. The OZEE and the EZEE, which have contracted foreign employees, shall,
within the time limit defined in the preceding Article 30, request, through
GAZEDA, that the entity with oversight of labour matters registers these
employees.
2. The request referred to in the preceding clause 31.1 shall only contain thefollowing items (cumulatively):a) Name, address and activity of the employer;b) Name, age, passport number and nationality of the foreign employee;c) Tasks to be executed and duration of the contract;;d) Certificates of educational and technical-professional qualifications orinformation regarding the employee's professional experience issued
by the last employer, and annexed to the employee's "curriculum vitae";37e) Declaration of compliance with the provisions of Article 29;f) Tax Authority issued certificate of tax compliance;g) National Institute of Social Security certificate of compliance; and,h) Four copies of the employment contract executed by the parties.

Subsection III
Immigration
Article 32(Immigration regime)
1. Authorised investors and their representatives as well as individual owners of
EZETIs in the case of residential tourism projects, together with their spouses
and minor children, shall be granted the right of permanent residence provided
that compliance with the requirements is duly documented by GAZEDA.
2. Foreign employees contracted to provide services in a ZEE shall be granted
temporary residence.

38

3. A foreign national who holds title to an individual EZETI shall be granted anannual multiple entry tourism visa.
4. Foreign professional consultants such as architects, lawyers, economists shallgenerate annual gross receipts of not less than one million Meticals from theirservices in order to be granted the right of permanent residence.
5. Specialists contracted to carry out certain activities within a ZEE shall be
granted a short-term temporary residence authorisation.

Subsection IV
Foreign Exchange regime
Article 33(Foreign Exchange regime)
1. The application of a special foreign exchange regime to the entities coveredby these Regulations derives from the authority given to the Council of Ministers
under the general terms of the foreign exchange legislation.
2. The OZEE and the EZEE are permitted to open, maintain and transact accounts
in foreign exchange inside and outside of Moçambique. The opening of external
accounts shall be with corresponding banks of national banks.

3. The maintenance and operation of external accounts is subject to the priorauthorisation of the Bank of Moçambique.
4. The import of capital funds or other type of financial contribution for theconstitution or increase of the share capital of an OZEE or an EZEE shall be
registered by means of the submission of the documentary proof to the Bankof Moçambique, which will issue the documentary certificates of registration.
5. Within a ZEE the permitted foreign exchange regime shall be unrestricted andbe considered as "off-shore" operations.

Article 34(External transfers of funds)
1. The external remittance of profits and dividends is permitted, subject to theprior authorisation of the Bank of Moçambique and provided that the investments
have been previously registered with the Central Bank and all taxes due havebeen paid.
2. The repatriation of capital is permitted provided that the provisions of specialised
legislation are observed.

Article 35(Financing)

The companies covered by the ZEE regime may obtain external finance without
the need for any prior authorisation by the Bank of Moçambique or any otherentity, provided only that a copy of the finance document shall be provided to theCentral Bank for the purposes of registration.

SECTION III
Licensing procedures
Subsection I
OZEE licensing
Article 36(OZEE licensing proposal)
1. After the approval of the ZEE project by the Council of Ministers, GAZEDA
has the competency to licence an OZEE, through the issuance of the ZEE
Developer Certificate.

392. The project proposals referred to in the preceding clause 36.1 shall contain thefollowing information, as may be applicable:a) The denomination and domicile or registered address of the applicant;b) Authenticated copy of the registration certificate of the applicant;c) A topographic plan of the proposed location of the ZEE;d) The schedule of investment and sources of finance.
3. The Certificate referred to in this Article shall constitute the sole instrument
required for the licensing of the OZEE and for the commencement of its activity.

Article 37(Nature of the licences)
1. The authorisations and licences for the installation, operation and exercise ofactivities in a ZEE, are an administrative authorisation and cannot be the subjectof private legal transactions except when authorised by the competent issuingauthority.

40

2. GAZEDA shall have the authority to carry out all of the necessary procedures
for acquiring all authorisations that are considered necessary and to issue theZEE Developer Certificate or the ZEE Company Certificate, as the case maybe.
3. The inter vivos transfer of establishments that operate under the ZEE regime
is subject to the prior authorisation of GAZEDA and the recording and registrationof the transfer in the certificate.
4. GAZEDA shall authorise the transfer subject only to the demonstration of
sufficient financial resources or sources for the continuity of the same activity.
5. The execution of legal arrangements in violation of the provisions of clauses
37.3 and 37.4 shall result in the revocation of the certificate and the investment
authorisation granted for this purpose.

Article 38(ZEE Management )A ZEE is managed by an OZEE who is authorised for this purpose in accordancewith the provisions of these Regulations. A ZEE is subject to the control andmonitoring by GAZEDA as a customs territory subject to its own respective
regime.

Subsection II
EZEE approval and licensing
Article 39(Approval de EZEE)
1. GAZEDA has the competency to approve and to licence EZEEs.
2. For the purposes of the preceding clause 39.1, GAZEDA shall constitute a
one-stop licensing centre, with officials from the various sectors with thenecessary decision-making authority in respect of the various required
licensing procedures.
3. GAZEDA shall provide the relevant authorities with information regarding thenumber and type of licences issued to companies for the purpose of recording
in their respective databases.

Article 40(Application for EZEE licensing & certification)
1. An application for issuance of an EZEE Certificate shall be submitted to
GAZEDA through the submission of the following documents:a) Application form for EZEE certification;b) Promissory lease or purchase contract for premises, or for access to anarea reserved for an EZEE;c) Documentary proof of the registration of the Project Implementing
Company in Moçambique.
2. GAZEDA may, according to the characteristics of the project to be implemented,
request additional information considered relevant for the taking of the decisionon the project.

Article 41(EZEE certification competency and timing)
1. The certification of an EZEE shall be carried out by GAZEDA in its capacity
as a Single Licensing Authority through the issuance of the relevant ZEE
Company Certificate within the maximum period of ten (10) business days
counting from the date of reception of the application, provided that all of therequirements which are needed for its approval have been fulfilled and havebeen confirmed and communicated by GAZEDA to the proponent.
2. The EZEE licensing includes the terms and conditions as determined by thecompetent authorities.

41

3. The EZEE Certificate is the sole document that is required for the commencementof activity and shall be valid for a renewable maximum period of ten years.

SECTION IV
Integrated Tourism Establishment Zones
Subsection I
Creation
Article 42(Creation of ZETIs)
1. Large scale Integrated Tourism Establishment Zones are created pursuant tospecialised legislation and are considered ZEEs for the purposes of theseRegulations.

42

2. Provincial Governments, the Municipality of Maputo and other interested
parties may, in accordance with the procedures to be defined by GAZEDA,
submit proposals for the creation of ZETIs to the Ministry of Tourism which
in turn will submit the proposal to the Council of Ministers, subject to the prioraffirmative review by the Investment Council.
3. The proposals referred to in the preceding clause 42.2 shall, inter alia, containthe following information in addition to that provided for by special legislation:a) the denomination and domicile or registered address of the applicant;b) notarially authenticated copy of the registration certificate of theapplicant;c) a topographical plan of the proposed ZETI location;d) the investment schedule and financing sources.

Article 43(Nature of the licences)
1. The authorisations and licences for the installation, operation and conduct ofactivities in a ZETI, except in the case of a Residential Tourism project, arean administrative authorisation and cannot be the subject of private legaltransactions.
2. GAZEDA shall, with the support of the Ministry of Tourism, have the authority
to carry out all of the necessary procedures for acquiring all authorisations thatare considered necessary and to issue the ZETI Developer Certificate or the
ZETI Company Certificate, as the case may be.

3. The inter vivos transfer of a portion or a unit of an Integrated Tourism
Establishment is subject to the prior authorisation of GAZEDA based on theaffirmative opinion of the Ministry of Tourism and the recording and registrationof the transfer in the certificate.
4. GAZEDA shall authorise the transfer subject only to the provisions of therespective land use and benefit plan.
5. The execution of legal arrangements in violation of the preceding clauses ofthis Article shall result in the revocation of the certificate and all other legal
consequences.

Article 44(Regime applicable to ZETIs)
The regime applicable to ZETIs is the provided for ZEEs subject to the particularitiesof the ZETIs and any specific rules for these Zones.

Subsection II
ZETI developers
Article 45(OZETI Certification)
1. GAZEDA has the competency to issue the ZETI Developer Certificate to the
Principal Proponent within the maximum period of fifteen (15) days.
2. The Certificate referred to in the preceding clause 45.1 is the sole instrument
required for the licensing of the ZETI Developer and for the commencementof activity.

Article 46(Regime applicable to OZETIs)
The regime applicable to OZETIs is that provided for in these regulations regarding
OZEEs without prejudice to the specific particularities of OZETIs and the specificterms applicable to these developers.

Subsection III
ZETI companies
Article 47(Legal nature of EZETIs)
1. EZETIs shall take the form of a commercial company, except in the case of43

time-shares and residential tourism whose titleholders shall be considered with
the necessary adaptations as individual EZETIs.
2. The process for the approval and licensing of EZETIs is coordinated by
GAZEDA.
3. The application for issuance of an EZETI Certificate, which shall include thefollowing documents, shall be submitted to GAZEDA:a) application form for certification of the EZEE;b) urbanisation plan;c) contract with the OZETI;d) the schedule of investment and sources of finance;e) document proving the registration of the Project Implementing Company
in Mozambique.
4. In accordance with the nature of the project to be implemented, GAZEDA may
solicit additional information provided that this information is material to thetaking of the decision and cannot be obtained after the commencement of theapplicant's activities.

44

Article 48(EZETI Certification)
1. The certification of an EZETI shall be done by GAZEDA through the issuanceof the competent ZETI Company Certificate within a maximum time periodof ten (10) business days, counting from the date of the reception of theapplication, provided that all of the requirements necessary for its approval
have been fulfilled and GAZEDA has confirmed and informed the proponent
regarding same.
2. The EZETI licence includes the terms fixed by the competent authority.
3. The EZETI Certificate is the only document that is required for thecommencement of the implementation and conduct of the activity and shallhave a renewable maximum ten (10) year term.
4. The time period for the commencement of activity by the companies wishing
to operate in the ZETI shall be fixed in the respective Certificate.
5. In the event of the total and definitive interruption of the exercise of activity
by the company before the end of the term of the respective certificate or
any of the renewal terms, and provided that the undertaking has not beentransferred in accordance with the terms of these Regulations, GAZEDA
shall determine what to do with the undertaking, taking into account thenational interests.

Article 49(Regime applicable to EZETIs)
Without prejudice to the provisions of the preceding subsection, the regime
applicable to EZETIs is that which is provided for in these Regulations for EZEEs
without prejudice to the specific particularities and the specific rules provided forthese companies.

SECTION V
Inspections
Article 50(Periodic inspections)
1. The inspection of an OZEE or an EZEE is subject to the prior authorisation
by GAZEDA.
2. The institution that wishes to carry out the inspection shall request theauthorisation from GAZEDA, at least thirty calendar days beforehand and shallspecify the reason for the inspection.
3. GAZEDA shall give the OZEE or the EZEE at least ten (10) business days
prior notice regarding the nature of the inspection and the respective date.
4. In the event that the company is not prepared to receive the inspection teamon the indicated date, the company shall indicate a new date that shall not belater than ten (10) business days after the date initially proposed.
5. The provisions of clause 50.2 of this Article do not apply to inspections by theTax Authority in the case of customs fraud or tax evasion.
6. The inspections referred to in this Article shall include a representative of
GAZEDA and of the OZEE and shall be conducted in such a way so as not todisturb or interrupt the normal activity of the company.
7. The rules established in this Article apply to OZEEs and EZEEs, except if a
different procedure is established in a superior legal instrument.

45SECÇÃO VI
Sales
Article 51(Sales and transfers of merchandise and goods)
Merchandise and other goods may be freely sold or otherwise transferred between
one company to another within a ZEE in accordance with the terms of the law.

Article 52(Sales of goods, improvements and provision of services)A ZEE developer, who carries out civil construction works or improvements within
a ZEE, may freely sell or lease the works and/or improvements provided that theworks and/or improvements are for the purpose of activities that are permitted
under the ZEE regime.

CHAPTER VIII
Industrial Free Zones
46

SECTION I
Creation of an IFZ
Article 53(Competencies)
1. The Council of Ministers has the authority to create an IFZ based on the proposalby the Investment Council.
2. Privately initiated proposals for the creation of an IFZ shall be submitted to
GAZEDA and shall contain, inter alia, the following information:a) The denomination and domicile or registered address of the applicant;b) A topographic plan of the proposed location of the IFZ;c) A description of the systems for the monitoring and security of thegoods to be brought into the IFZ;d) The investment value and schedule and the sources of finance as wellas the proof of financial capacity to carry out the project through thesubmission of legal documentation for this purpose;e) Authenticated copy of the document evidencing the company registrationof the applicant;f) Documentary proof demonstrating the capacity to administer andmanage undertakings of a similar nature.

Article 54(Processing of the application)
1. GAZEDA is responsible for the analysis of the proposals and the drafting of
the opinion to be submitted by the Investment Council to the Council of
Ministers for the purpose of deciding on the creation of the IFZ.
2. The opinion referred to in the preceding clause 54.1 shall be prepared after
consulting with the Mozambican Tax Authority and with the Municipal
authorities and/or Provincial Government of the location where the IFZ is to
be installed.

Article 55(OZFI Certificate)
1. GAZEDA has the competency to issue the OZFI Certificate after the approvalof the project by the Council of Ministers, and on certification by the Tax
Authority that the security systems have been installed.
2. The Certificate referred to in the preceding clause 55.1 constitutes the only
instrument required for the OZFI's licensing and start of activity.

Article 56(EZFI licence application)
The applications for EZFI licensing, which shall include the following documents,
shall be submitted to GAZEDA:a) duly filled in EZFI licence application.
b) promissory contract for the lease and/or purchase or for access to thearea reserved for EZFIs executed between the applicant company andthe OZFI or between the applicant company and the EZFI owner of theindustrial buildings;c) submission of the documentary proof of registration of the Project
Implementing Company in Mozambique.

Article 57(Competency for licensing)
1. GAZEDA has the competency for the licensing of IFZ companies based on
the issuance the competent EZFI Certificate provided that all of the applicablelegal requirements have been satisfied.

47

2. The licensing provided for under this Article does not exempt the EZFI fromthe following mandatory registrations and notifications:a) registration at the relevant tax office for purposes of acquiring a tax
identification number (NUIT);b) registration with the National Institute of Social Security (INSS);c) notification to the competent authorities for the conduct of the relevant
inspection after conclusion of the construction works and the installationof the equipment.

Article 58(Inspections)
1. The inspection of the sanitary, hygiene and security conditions by the competentauthorities shall be carried out within the maximum period of five (5) businessdays from the date of notification by the proponents of the conclusion of theworks and the installation of the equipment.

48

2. In the event that the inspection referred to in the preceding clause 58.1 finds
irregularities that do not put the public health or the safety of the workers or
the environment at risk, the EZFI shall, within a maximum time period of fortyfive (45) business days, remove the irregularity. At the end of this time period,
the competent authorities may, at their own initiative, carry out another inspection.
3. The failure to carry out the inspection within the time period referred to in thepreceding clause 58.2 by the competent authorities constitutes the tacit approvalof the companies operating conditions.

SECTION II
Article 59(Authorised activities)
1. All activities of an industrial nature shall be authorised in an IFZ provided thatseventy per cent (70%) of annual production volume are for export.
2. The construction and development of basic infrastructure for the implantationof an IFZ are also eligible for the same benefits granted to activities carriedout in IFZs.
3. Exploration for and extraction of natural resources are excluded from the IFZ
regime.
4. The manufacture, assembly or any form of processing of arms, munitions,pyrotechnics and explosive is prohibited in IFZs.

Article 60(Periodic inspections)
The rules regarding periodic inspections that are applicable to ZEEs shall also
apply to OZFIs and EZFIs.

Article 61(Companies located outside of an IFZ)
1. A company which wishes to set up outside of an IFZ and to have the benefitsof the IFZ regime must apply to GAZEDA for the respective authorisation,
The application must comply with the requirements set out in the IFZ Customs
Regime Regulations and satisfy one of the following criteria:a) Initial investment equal to or greater than twenty five million Meticals(25,000,000.00Mts) to be realised within the first two years of activity;b) Current or planned installed power capacity equal to or greater than 500
KvA;
2. Imports for the project shall be carried out in accordance with the provisions
in these Regulations applicable to ZEEs once the installation of the project isconcluded and after the issuance of the Certificate of Security Systems inaccordance with the IFZ Customs Regime.

Article 62(Time period for installation)
The period of time for the installation of project undertakings subject to the IFZ
regime is six months counting from the date of the project authorisation provided
that this time period may be extended by GAZEDA based on a duly justified
request submitted by the interested parties.

SECTION III(Special regimes)

Article 63
The ZEE special regimes set out in these Regulations are, with any necessary
adaptation, applicable to OZFIs and EZFIs, subject to the provisions in thefollowing Articles.

49Article 64(Contracting of foreign employees)
The IFZ regime for the contracting of foreign employees and the terms of
employment applicable to developers and companies shall comply with theprovisions of specific legislation.

SECTION IV(Customs and fiscal regime)

Article 65(Sales into the local market)
1. An EZFI is authorized to sell into the local domestic market up to thirty percent (30%) of its production volume, in conformity with its annual production
plan. All applicable fiscal imposts including customs duties, VAT and excise(Specific Consumption Tax/ICE) tax shall be paid on the sales.

50

2. For those cases in which certain goods and products benefit from the exemption
or lower rates of customs duties under the terms of bilateral or regional
agreements that are lower than the rates referred to in clause 1 of this Article,
these rates shall be taken into consideration in respect of sales of similar IFZ
produced goods into the internal domestic market.
3. The rules regarding the origin of goods shall not be applied to the applicationof the preceding clause 65.2.
4. The percentage authorised under the terms of clause 65.1 may be changed by
the Minister with oversight of Planning and Development matters on the basisof an application by the EZFI in question, accompanied by the favourable
opinion of GAZEDA and the Mozambican Tax Authority. GAZEDA and theMozambican Tax Authority shall issue clear instructions regarding the generalcriteria for eligibility for such a change.

Article 66(Imports and exports das IFZ)
1. The imports and exports of merchandises to and from an IFZ shall be carriedout in strict compliance with the requirements established in the IFZ Customs
Regime and the Customs Transit Regime.
2. The rules applicable to ZEE imports and exports shall also be applied with thenecessary adaptations.

Article 67(Local suppliers)
The sales of goods and services by local suppliers to an IFZ Developer or IFZ
Company to be used for the exercise of licensed activities within the IFZ isconsidered to be an export.

Article 68(Sale and transfer of merchandises and goods within an IFZ)
Merchandise and other goods may be sold or otherwise transferred from one
company to another within an IFZ in accordance with the terms of the IFZ Customs
Regime.

CHAPTER IX
Final and transitory provisions
Article 69(Transitory regime)
1. Until the approval of the supplementary legal diplomas, the procedures applicable
to IFZ shall apply to the ZEE regime, to the extent necessary and with any
necessary adaptations.
2. Until the approval of the supplementary legal diplomas, the provisions of theIndustrial Free Zone Customs Regime Regulations and the Customs Transit
Regulations with any necessary adaptations shall apply to the entry and exitof merchandise to and from a ZEE.
3. The terms of authorisation of investment projects authorised prior to the entry
into force of these Regulations shall remain valid and of binding force.

Article 70(Communications and correspondence)
Communication and the exchange of correspondence between investors and theentities responsible for the coordination of the investment process are binding
provided that they are in writing and delivered to parties or entities to which
addressed. The respective documents shall be legally binding if signed by theauthorised representative of the party or entity in question.

51

Article 71(Claims)

1. Claims linked to investment matters that arise from the application of Law
3/93, of 24 June and these Regulations, shall be duly documented and submitted
to CPI or GAZEDA, according to their respective areas of jurisdiction.
2. CPI or GAZEDA shall submit each claim to the relevant entity and request therespective review as well as measures for the resolving of the claim if the claim
concerns matters outside of their respective exclusive areas of jurisdiction.
3. If, within a period of twenty days counting from the date of the request referred
to in the preceding clause 71.2, no response is received and no measures taken
to resolve the claim submitted, CPI or GAZEDA shall submit a proposedsolution for consideration and decision by the Minister with oversight ofPlanning and Development matters, including express details of the lack of
response or the procedure taken by the State entity that is the subject of theclaim.
4. The provisions of this Article are without prejudice to the right of the interested
parties to recourse to the procedures for the resolution of disputes regarding
investment matters provided for in Article 25 of Law 3/93, of 24 June.

52

Article 72(Existing IFZ companies)
IFZ developers and companies retain all acquired rights and, if applicable, shalladjust to the new regime within the maximum period of sixty days.

Article 73(Existing companies operating within the geographical area of a ZEE)
1. Companies in existence as of the date of publication of this decree and operating
within the geographical area of a ZEE may apply to become a company subject
to the ZEE regime.
2. The rights and obligations of an EZEE date from the date of certification of
the applicant company by GAZEDA.
3. GAZEDA shall, in coordination with the Mozambican Tax Authority and inaccordance with the tax legislation in force, establish the mechanisms for thealteration of the fiscal regime of these companies.
4. GAZEDA shall establish the other terms and requirements to be observed by
the applicant companies transitioning to the ZEE regime.

Code ofFISCAL Benefits

Law nº 4/2009, of 12th January

Contents
Law 4/2009 of 12 January......................................................................... 55
TITLE I GENERAL PROVISIONS .................................................................. 56
CHAPTER I Fundamental Principles ............................................................... 56
Article 1 - Scope of Application - ......................................................................... 56
Article 2 - Concept of Fiscal Benefit - ..................................................................56
Article 3 - Entitlement to Fiscal and Customs Benefits - ..................................... 57
Article 4 - Accumulation of Fiscal Benefits - ....................................................... 57
Article 5 - Transfer of Fiscal Benefits - ................................................................ 57
Article 6 - Requirements for Exemption from Customs Duties and Value Added Tax -. 57
Article 7 - Time Period for the exemption from Customs Duties and Value Added Tax - .58
Article 8 - Inspection and Audit - ......................................................................... 58
CHAPTER II Procedures for obtaining Fiscal Benefits ................................. 58
Article 9 - General Recognition Requirements - .................................................. 58
Article 10 - Recognition of internal tax benefits - .................................................... 59
Article 11 - Recognition of import benefits - .......................................................... 59
Article 12 - Proof of Investment - .......................................................................... 59

53

TITLE II FISCAL BENEFITS........................................................................... 60
CHAPTER I General Benefits................................................................................ 60
Article 13 - Scope of application - .......................................................................... 60
SECTION I Benefits on the Import of Goods .................................................. 60
Article 14 - Customs Duties and Value Added Tax Exemption - ............................ 60
SECTION II Fiscal Benefits in respect of Income ........................................... 60
Article 15 - Investment tax credit - ......................................................................... 60
Article 16 - Accelerated Depreciation and Reintegration - .................................... 61
Article 17 - Modernization and introduction of new technology - ......................... 62
Article 18 - Professional Training - ........................................................................ 62
Article 19 - Expenditure considered to be Fiscal Costs - ....................................... 62
CHAPTER II Specific Benefits............................................................................63
SECTION I Creation of basic infrastructure ................................................... 63
Article 20 - Qualifying Investments - ..................................................................... 63
Article 21 - Customs Duty and Value Added Tax Exemption - .................................63
Article 22 - Income Tax - ....................................................................................... 64
SECTION II Rural Commerce and Industry ................................................... 64
Article 23 - Qualifying Investments - ..................................................................... 64
Article 24 - Customs Duty and Value Added Tax Exemption - .................................64
SECTION III Manufacturing and Assembly Industries ................................. 65
Article 25 - Qualifying Investments - ..................................................................... 65
Article 26 - Exemption of customs duties - ............................................................ 65

SECTION IV Agriculture and Fishery ............................................................. 66
Article 27 - Customs Duty and Value Added Tax Exemption- ................................ 66
Article 28 - Income Tax - ....................................................................................... 66
Article 29 - Additional Benefits - ........................................................................... 66
SECTION V Hotelry and Tourism .................................................................... 66
Article 30 - Qualifying Investments - ..................................................................... 66
Article 31 - Customs Duty and Value Added Tax Exemption- ................................ 67
Article 32 - Investment tax credit, accelerated depreciation and reintegration- ...... 68
Article 33 - Additional Benefits - ........................................................................... 68
SECTION VI Science and Technology Parks .................................................. 68
Article 34 - Customs Duty and Value Added Tax Exemption- ................................ 68
Article 35 - Income Tax - ....................................................................................... 69
SECTION VII Large Dimension Projects.......................................................... 69
Article 36 - Qualifying Investments - ..................................................................... 69
Article 37 - Customs Duty and Value Added Tax Exemption- ................................ 69
Article 38 - Additional Benefits - ........................................................................... 70
SECTION VIII Rapid Development Zones ........................................................70
Article 39 - Definition - .......................................................................................... 70
Article 40 - Qualifying Areas - ............................................................................... 70
Article 41 - Eligible Activities - ............................................................................. 70
Article 42 - Customs Duty and Value Added Tax Exemption- ................................ 71
Article 43 - Fiscal benefits in respect of Income - ................................................. 71
Article 44 - Additional Benefits - ........................................................................... 72
SECTION IX Industrial Free Zones.................................................................. 72
Article 45 - Customs Duty and Value Added Tax Exemption- ................................ 72
Article 46 - Income Tax - ....................................................................................... 72
SECTION X Special Economic Zones............................................................... 73
Article 47 - Customs Duty and Value Added Tax Exemption- ................................ 73
Article 48 - Income Tax - ....................................................................................... 73
SECTION III Sanctions...................................................................................... 74
Article 49 - Sanções Impeditivas, Suspensivas ou Extintivas dos Benefícios Fiscais - . 74
Article 50 - Cancellation and suspension of fiscal benefits - ................................. 74
CHAPTER IV Miscellaneous ............................................................................. 75
Article 51 - General transitory regime - ................................................................. 75
Article 52 - Disposal of assets subject to fiscal benefits - ...................................... 75
Article 53 - Supplementary rules - ......................................................................... 75
Article 54 - Entry into force - ................................................................................. 7554REPÚBLIC OF MOÇAMBIQUEASSEMBLY OF THE REPUBLIC
Law n° 4/2009, of 12 January
It being necessary to reformulate the Code of Fiscal Benefits approved by Decree
16/2002 of 27 June in order to rationalize the fiscal benefits for investments andmake them more effective as an instrument of the political economy, the Assemblyof the Republic pursuant to the provisions of Article 127.2 and Article 179.2 o)of the Constitution determines:

ARTICLE 1
The Code of Fiscal Benefits, which is annexed to this Law as an integral part
thereof, is approved.

ARTICLE 2
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The Council of Ministers is delegated the competency to approve regulations in
respect of this Law and shall do so within a period of 90 days from the date of
publication.

ARTICLE 3
All legislation contrary to this Law is revoked.

ARTICLE 4
This Law enters into force on 1 January 2009.
Approved by the Assembly of the Republic on 26 December 2008
The President of the Assembly of the Republic, Eduardo Joaquim Mulémbwè
Promulgated on 1 January 2009.
Let it be published.
The President of the Republic
ARMANDO EMÍLIO GUEBUZACODE OF FISCAL BENEFITS
TITLE I
GENERAL PROVISIONSCHAPTER I
Fundamental Principles

Article 1(Scope of application)
1. The provisions of this Code apply to investments carried out by individual andcorporate persons provided that such persons are duly registered for tax purposes.
2. The investments referred to in the preceding clause are investments that are
carried out under the scope of the investment law and its regulations, subject
to the exceptions provided for in this code.

Article 2(Concept of Fiscal Benefit)
1. Fiscal benefits are those measures that exempt or reduce the amount of tax tobe paid in order to benefit activities that have a recognized public interest as
well as to encourage the economic development of Mozambique.
2. Fiscal benefits are those provided for in this Code, namely:a) deductions from taxable income;b) deductions from tax;c) accelerated depreciation and reintegration;d) investment tax credit;e) exemptions;f) the reduction in tax rate and the deferral of the payment of tax.
3. Fiscal benefits are considered to be fiscal expenditure, and the appropriate
declaration of benefits used in each tax year is required for the purpose of theirdetermination and control.

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Article 3(Entitlement to Fiscal and Customs Benefits)
1. Investments carried out under the scope of the Investment Law are entitled to thefiscal benefits defined in this Code, provided that the investments observe theterms established herein excluding investments as provided for in paragraph 3of this article.
2. Investments which are also entitled to the fiscal benefits provided for under
this Code are:a) investments that are carried out outside the scope of the investment law incommercial and industrial activities in rural areas;b) investment in new infrastructures built for retail and wholesale commerce;c) manufacturing and assembly industries.
3. With the exception of the situations referred to in the preceding paragraphinvestments carried out in commercial activities are excluded from entitlement
to enjoyment of fiscal benefits.

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4. The effective enjoyment of fiscal benefits may not be revoked, nor may theacquired right to the benefit be abrogated, except where as provided for in thiscode, the beneficiary has not complied with its obligations or if the benefit was
improperly granted.

Article 4(Accumulation of Fiscal Benefits)
The specific fiscal benefits provided for in this Code may not be aggregated withother specific or general benefits, without prejudice to the cases expressly provided
for in this Code.

Article 5(Transfer of Fiscal Benefits)
The fiscal benefits granted under this Code are transferable during their term ofvalidity by means of an authorization of the Minister with oversight of the areaof investment promotion provided that the fiscal benefits are not altered and thattransferee fulfils the requirements for the enjoyment of such benefits.

Article 6(Requirements for Exemption from Customs Duties and Value Added Tax)
1. An exemption from customs duties, and that is only granted when the goods
to be imported are not produced in Mozambique or if produced in Mozambique
do not satisfy the specific characteristics for the purpose and function required

or inherent in the nature of the project and the respective activity to be carriedout and explored.
2. The aforesaid said exemption does not apply to food, drink, tobacco, clothing,passenger vehicles and other articles of personal and domestic use.

Article 7(Time Period for the exemption from Customs
Duties and Value Added Tax)
The exemption from customs duties and Value Added Tax - VAT, is granted forthe period of the first five years of the project implementation.

Article 8(Inspection and Audit)
All individual and corporate persons who are holders of the right to enjoy fiscal
benefits as provided for under this Code are subject to regular inspection andaudit carried out by the Tax Administration and other competent entities for the
purpose of controlling compliance with the prerequisites for the respective fiscal
benefits and compliance with the obligations established for such holders.

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CHAPTER II
Procedures for obtaining Fiscal Benefits
Article 9(General Recognition Requirements)
The beneficiary of fiscal benefits shall comply with the following generalprerequisites for obtaining fiscal benefits, without prejudice to other specificrequirements established by law:a) tax registration, namely acquisition of a personal tax identification number(NUIT);b) have organised books and accounts in compliance with the General Accounting
Plan and the requirements of the Corporate Income Tax Code (IRPC) and
the Personal Income Tax Code(IRPS);c) not have committed any infraction of a tax nature, as provided under theterms of Law 2/2006, of 22 March (Tax Infraction Law).

Article 10(Recognition of internal tax benefits)
Subject to any provisions to the contrary, in order to obtain automatic recognitionof the fiscal benefits which apply to domestic taxes collected by the Tax
Administration, the titleholders of investment projects entitled to the enjoymentof Fiscal Benefits shall submit to the local Tax directorate the investment
authorisation order and terms or other legally probative instrument together witha copy of the declaration of commencement of activity.

Article 11(Recognition of import benefits)
1. In order to enjoy the customs and fiscal benefits provided for under this Codewith respect to taxes assessed by the Customs Authority, the titleholder of such
benefits shall submit to the Customs Services a list of the goods to be importedwith exemption from payment of the customs duty and other imposts as wellas the other items required under the terms of other legal instruments including
the tax registration identification number.
2. The list referred to in paragraph 1 of this Article shall be approved after theissuance of the investment project authorisation and subject to the terms
established in the Investment Law Regulations and other applicable legislation.

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3. The Customs Services shall, with five business days dating from the date ofreceipt of the list, undertake the respective registration and control procedures.

Article 12(Proof of Investment)
1. In order to enjoy the Fiscal Benefits in respect of income in accordance withthe terms of this Code, investment project titleholders entitled to benefits shallsubmit the following items together with the income tax declaration required
under the Corporate and Personal Income Tax Codes (IRPC & IRPS):a) a declaration stating the amount of the investment realised, using the form
approved by the Minister having oversight of Finances;b) the origin of the purchases and expenditure which are the basis of any
deductions, indicating the invoice number, the name of the supplier, theinvoiced amount and amount to be deducted as well as the accelerated
depreciation amounts.
2. In order for the Tax Administration to determine the tax expense, investment
project titleholders referred to in the preceding paragraph shall submit thedeclaration with the respective calculation of the value of the tax benefit asprovided for in article 2.3 of this Code at the time of the submission of theincome tax declaration required under the IRPC and IRPS Codes.

TITLE IIFISCAL BENEFITS
CHAPTER I
General Benefits
Article 13(Scope of application)
The general benefits provided for under this Chapter apply to investments thatare not the beneficiaries of the specific benefits provided for under this Code.

SECTION I
Benefits on the Import of Goods
Article 14(Customs Duties and Value Added Tax Exemption)
Investments carried out under the terms of the Investment Law benefit from an
exemption from payment of customs duties and VAT on the import of equipmentclassified as class "K" in the Customs Tariff Schedule ("Pauta Aduaneira")
including the accompanying spare and accessory parts.

SECTION II
Fiscal Benefits in respect of Income
Article 15(Investment tax credit)
1. Investments carried out in the City of Maputo benefit, for a period of five tax
years, from a deduction (not to exceed the tax payable in respect of the investment
project activity) from Corporate Income Tax (IRPC) that is equal to 5% of thetotal investment actually realised.
2. In the case of investment projects carried out in the other provinces, thepercentage, as established in the preceding paragraph 1, is 10%.
3. In the case of Personal Income Tax (IRPS), the investment tax credit deductionreferred to in the preceding paragraphs shall not exceed the tax payable inrespect of income taxable under Category 2 income (as defined in the IRPS
Code).

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4. Any portion of the tax credit not used in the respective tax year may be carriedforward and used in the five successive tax years dating from the date ofcommencement of investment for projects currently in operation and thecommencement of operations for new projects.
5. For the purposes of the provisions of the preceding paragraphs, only investment
in new tangible fixed assets acquired by and utilised in the investment project
operations within Mozambique qualifies.
6. The provisions of this article do not apply when the investment in tangible
fixed assets results from:a) construction, acquisition, repair or extension of any buildings;b) passenger vehicles;c) furniture and articles of comfort and decoration;d) social equipment;e) specialised equipment which is considered to be advanced technology under
the terms of this Code;f) other investment assets that are not directly and necessarily associated withthe productive activity carried out by the project.

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7. For the purposes of this Code:a) the commencement of investment is considered to be the moment in which
the procedures to obtain Fiscal Benefits is initiated, after approval of theinvestment project;b) the commencement of operations is considered to be the moment in which
the operations that produce taxable income are initiated.

Article 16(Accelerated Depreciation and Reintegration)
1. Accelerated depreciation of new immovable assets used in the conduct of theinvestment project is permitted. The normal legal rates, which apply to thecalculation of depreciation and reintegration amounts considered to be deductible
costs for the purpose of determination of taxable income for IRPC or IRPS,
may be increased by 50%.
2. The provisions of the preceding paragraph also apply on the same terms torehabilitated immovable assets and to machinery and equipment used in industrial
and /or agro-industrial operations.

Article 17(Modernization and introduction of new technology)
1. The amount invested in specialised equipment utilizing new technology for the
conduct of investment project operations shall, during the first five years fromthe commencement of operations, benefit from a deduction from taxable income
for the purposes of Corporate Income Tax (IRPC) equal to a maximum of 10%
of taxable income.
2. The deduction referred to in the preceding paragraph as well as the respective
terms applies to Personal Income Tax (IRPS), but only in respect to income
from activities falling within Category 2 income (as defined in the IRPS Code).

Article 18(Professional Training)
1. The cost of investments in professional training of Mozambican employees isdeductible from taxable income for the purposes of the calculation of Corporate
Income Tax (IRPC), during the first five years dating from the date ofcommencement of operations up to a maximum amount equal to 5% of taxable
income.
2. In the case of professional training in the utilization of equipment considered
to be new technology, as referred to in the preceding article, the maximum
amount deductible from taxable income for the purposes of the calculation of
Corporate Income Tax (IRPC), is equal to 10% of taxable income.
3. The deductions referred to in the preceding paragraphs as well as the respective
terms apply to Personal Income Tax (IRPS), but only in respect to income from
activities falling within Category 2 income(as defined in the IRPS Code).
4. The investment cost referred to in the preceding paragraphs does not include
the cost of equipment and other assets of the company used in the professional
training.

Article 19(Expenditure considered to be Fiscal Costs)
1. During a period of five tax years dating from the date of commencement ofoperations, investments eligible for fiscal benefits under the terms of this Codethe following allowances may be also considered as costs for the determinationof taxable income for corporate income tax (IRPC) purposes:a) in the case of investments carried out in the City of Maputo, 110% percentof the value of expenditure in the construction and rehabilitation of roads,
railways, airports, mail delivery, telecommunications, water supply, electrical62

energy, schools, hospitals and other works that are considered to be of public
utility by the competent authority;b) In the case of the other provinces, an amount equal to 120% percent of theexpenditure, under the same terms as the previous paragraph.
c) In the case of expenditure for the acquisition for personal ownership ofworks of art and other objects that are representative of Mozambican culture
as well as activities that contribute to the development of such works under
the terms of the Law for the Defence of Cultural Patrimony, Law 10/88, of
22 December, only 50% of the expenditure is deductible as a cost for tax
purposes.
2. The terms and provisions of the previous paragraph shall be applicable toincome subject to the Personal Income Tax (IRPS), but only in respect ofincome from activities belonging to the Second Category of IRPS.

CHAPTER II
Specific Benefits
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SECTION I
Creation of basic infrastructure
Article 20(Qualifying Investments)
The provisions of this section are applicable to investment by the private sector
or by public-private partnerships that has as its exclusive objective the establishmentof basic public infrastructure that is essential for the promotion and attraction of
investments, for the conduct of concrete activities in sectors of the national
economy, such as the construction and rehabilitation of roads, rail lines, airports,
water supply, electricity, telecommunications and others.

Article 21(Customs Duty and Value Added Tax Exemption)
Investments defined in the preceding article benefit from an exemption from thepayment of customs duties and VAT on the import of goods classified as class"K" in the Customs Tariff Schedule ("Pauta Aduaneira") including theaccompanying spare and accessory parts.

Article 22(Income Tax)
1. Investments that have the exclusive objective of establishing basic public
infrastructure as defined in article 19 of this Code, benefit from the following
incentives with respect to Corporate Income Tax (IRPC):a) an 80% reduction in the rate of IRPC tax in the first five tax years;b) a 60%reduction in the rate of IRPC from the 6th to the 10th tax year;c) a 25% reduction in the rate of IRPC from the 11th to the 15th tax year.
2. In the case of taxpayers subject to Personal Income Tax (IRPS), the benefit
provided for in the previous paragraph shall apply only to the taxable income
derived from the activity benefitting from the incentive but only in respect ofincome from activities belonging to the Second Category of IRPS.

SECTION II
Rural Commerce and Industry
Article 23(Qualifying Investments)
The provisions of this section are applicable to investment in the construction
and/or rehabilitation of infrastructure to be used exclusively for the conduct ofcommercial and industrial activity in rural areas.

Article 24(Customs Duty and Value Added Tax Exemption)
1. Investments in commerce carried out in rural areas benefit from an exemption
from payment of customs duties and VAT on the import of goods classified
as class "K" in the Customs Tariff Schedule ("Pauta Aduaneira") as well asothers which are essential to the conduct of the activity, namely:a) freezers;b) scales;c) weights;d) cash registers;e) oil and fuel meters;f) counter.

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2. Investments in industry carried out in rural areas benefit from an exemption
from payment of customs duties and VAT on the import of goods classified
as class "K" in the Customs Tariff Schedule ("Pauta Aduaneira") including
the accompanying spare and accessory parts.
3. The application for the enjoyment of the fiscal and customs benefits shall bemade by a legally registered business entity and shall include the entity's NUIT
(tax identification number) and the business licence for commercial or industrial
activity in rural areas.

SECTION III
Manufacturing and Assembly Industries
Article 25(Qualifying Investment)
The provisions of this section apply to investments in the manufacturing andassembly industry sector.

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Article 26(Exemption of customs duties)
1. Investments in the manufacturing industry sector benefit from an exemption
from payment of duties on the import of raw materials to be used in theindustrial manufacturing process.
2. Investments in the assembly of motor vehicles; electronic equipment; computerand communications technology and others benefit from an exemption frompayment of customs duties on the import of materials to be used in the industrial
production process.
3. The application for the enjoyment of the fiscal benefits defined in the preceding
paragraphs shall be made by a legally registered business entity and shall
include the entity's NUIT (tax identification number) and the business licence
for industrial activity.
4. The fiscal benefits referred to in paragraphs 1 and 2 of this article are granted
to investment projects which both demonstrate and assume the obligation tomaintain an annual invoicing not less than 3.000.000,00 Meticais and whichhave a final product added value of at least 20%.

SECTION IV
Agriculture and Fishery
Article 27(Customs Duty and Value Added Tax Exemption)
Investment in agriculture and aquaculture shall benefit from an exemption frompayment of customs duties and VAT on the import of equipment classified as class"K" in the Customs Tariff Schedule ("Pauta Aduaneira") including theeaccompanying spare and accessory parts.

Article 28(Income Tax)
1. Investment in agriculture and aquaculture benefit from the following tax
incentives with respect to Corporate Income Tax (IRPC):a) an 80% reduction in the IRPC rate until 31 December 2015;b) a 50% reduction in the IRPC rate from 2016 until 2025.
2. In the case of taxpayers subject to Personal Income Tax (IRPS), the benefit
provided for in the previous paragraph shall apply only to the taxable income
derived from the activity benefitting from the incentive but only in respect ofincome from activities belonging to the Second Category of IRPS.

Article 29(Additional Benefits)
The fiscal benefits provided for in articles 18 and 19 of this Code shall apply toinvestments in agriculture and aquaculture as defined in this section.

SECTION V
Hotelry and Tourism
Article 30(Qualifying Investment)
1. The provisions of this section are applicable to investments in hotelry andtourism industry, namely:66a) construction, rehabilitation, expansion or modernization of hotelry units
and the respective complementary and related parts, with the principal
purpose being the provision of tourism services;b) development of infrastructure for the establishment of camping and caravanparks with a minimum three star classification;c) equipment for the development and exploration of marinas;d) development of wild life reserves, national parks and game reserves fortourism.
2. Investments in the following areas are excluded from the provisions of theprevious paragraph:a) rehabilitation, construction, expansion or modernization of restaurants, bars,
cafés, food establishments, discotheques and other similar units when nota part of the units referred to in the previous paragraph;b) car rental;c) travel agencies, tourism operators and similar activities.
3. Investments carried out in tourism and hotelry activity, which are not eligible
for the specific benefits defined in the previous paragraph, are entitled to thegeneral benefits defined in articles 15 to 19 of this Code.

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Article 31(Customs Duty and Value Added Tax Exemption)
Qualifying investment as defined in article 30.1 of this Code shall benefit froman exemption from payment of customs duties and VAT on the import of equipmentclassified as class "K" in the Customs Tariff Schedule ("Pauta Aduaneira") as
well as the following goods which are considered to be indispensable for the
conduct of tourism and hotelry activity provided that the quantities are limited tothe amounts strictly necessary for the construction and outfitting, namely:a) construction materials excluding cement, blocks, tiles, paint and varnishb) rugs and carpets;c) sanitary equipment;d) furniture;e) textiles;f) elevators;g) air conditioners;h) kitchen equipment;i) refrigeration equipment;j) tableware and restaurant and bar articles;k) communication equipment;l) safes;

m) computer and sound equipment;n) televisions;o) recreational watercraft, yachts and related equipment and water sports
security equipment;p) aircraft, aeroplanes, helicopters, hang-glider, gliders, flight simulators,
equipment and related equipment and tourist activity security equipment.

Article 32(Investment tax credit, accelerated depreciation and reintegration)
1. Qualifying investment under the terms of this section also benefit from the tax
credit provided for under article 15 of this Code.
2. Accelerated depreciation of new immovable assets, vehicles, automobiles andother tangible fixed assets used in the conduct of the hotelry and tourism
activities is permitted. The normal legal rates that apply to the calculation ofdepreciation and reintegration amounts considered to be deductible costs forthe purpose of determination of taxable income for Corporate Income Tax(IRPC) or Personal Income Tax (IRPS) may be increased by 50%.

Article 33(Additional Benefits)
Investments defined in this section benefit from the benefits provided for in articles
17 to 19 of this Code.

SECTION VI
Science and Technology Parks
Article 34(Science and Technology Parks )Investments in scientific investigation, development of information andcommunication technologies, as well as research and development benefit, forthe duration of the project, from an exemption from the payment of customs duties
and VAT on the import of scientific, teaching and laboratory material and equipment,
including software and support materials, for technical, scientific education,teaching and investigation construction materials, machinery, equipment, and therespective accompanying accessories and spare parts.

68Article 35(Income Tax)
1. Investments in the areas of scientific investigation, information andcommunication technology development as well as research and development
carried out in science and technology parks shall benefit from the following
incentives in respect of Corporate Income Tax (IRPC):a) IRPC exemption in the first five tax years;b) a 50% reduction in the rate of IRPC tax from the 6th to the 10th tax year;c) a 25% reduction in the rate of IRPC from the 11th to the 15th tax year.
2. In the case of Personal Income Tax (IRPS) taxpayers, the benefit provided forin the previous paragraph shall apply only to the taxable income derived fromthe activity which is the beneficiary of the incentive and which is Category 2
income.
3. Investments that do not fall within the areas of scientific investigation,technological development, information and communication, and research anddevelopment carried out in science and technology parks are not entitled to thefiscal benefits referred to in paragraphs 1 and 2 of this article.

SECTION VII
Large Dimension Projects

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Article 36(Qualifying Investments)
Authorized investment that exceeds twelve million five hundred thousand
Meticais ¹, as well as investment in public domain infrastructure carried out under
the regime of a concession are entitled to the fiscal benefits set out in this section.

Article 37(Customs Duty and Value Added Tax Exemption)
Investments defined in the preceding article shall benefit from an exemption frompayment of customs duties and VAT on the import of construction materials,
machinery, equipment accompanying spare and accessory parts and other goods
used in the carrying out of the activity.

¹

Technical error. Value to be corrected to twelve billion five hundred million Meticais.

Article 38(Additional Benefits)
The fiscal benefits provided for in articles 15 to19 of this Code shall apply toinvestments defined in this section.

SECTION VIII
Rapid Development Zones
Article 39(Definition)

For the purposes of this Code, Rapid Development Zones(ZRD) are geographic
areas within the national territory of Mozambique which have great natural resource
potential but which are lacking in infrastructure and have a weak level of economic
activity.

Article 40(Qualifying Areas)
1. Rapid Development Zones include the following regions in Mozambique:Zambeze River Valley zone, Niassa Province, Nacala district, Ilha deMoçambique (Mozambique Island), Ibo Island and other areas which may beapproved by the competent authority.
2. The Zambeze River Valley zone includes:a) all the districts in Tete Province;b) the districts of Morrumbala, Mopeia, Chinde, Milange, Mocuba, Maganjada Costa, Nicoadala, Inhassunge, Namacurra and Quelimane in Zambézia
Province;c) the districts of Gorongosa, Maringué, Chemba, Caia, Marromeu, Cheringoma
and Muanza in Sofala Province;d) the districts of Bárue, Guro, Tambara and Macossa in Manica Province.
3. The Council of Ministers has the competency to establish new rapid development
zones under the terms of this Code.

Article 41(Eligible Activities)
1. The following activities are eligible for the fiscal benefits specified in this Section:a) agriculture;b) tree plantations;70c) aquaculture;d) stock-raising;e) forestry operations;f) wild life related operations;g) water supply;h) electricity generation, transport and distribution;i) telecommunications;j) construction of public use infrastructures;k) housing construction;l) construction of agriculture related infrastructures;m) construction of hotel infrastructure and hotel operation, tourism and related activities;n) construction of trade infrastructure;o) industry;p) cargo and passenger transport;q) education;r) health.
2. The fiscal benefits provided for in this Section apply exclusively to investmentsin activities carried out in Rapid Development Zones.

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Article 42(Customs Duties and Value Added Tax Exemption )Investments carried out in Rapid Development Zones in the activity sectors definedin the previous paragraph benefit from an exemption from payment of customs
duties and VAT on the import of goods in class "K" of the Customs Tariff Schedule("Pauta Aduaneira") including the accompanying accessories and spare parts.

Article 43(Fiscal benefits in respect of Income)
1. Investments located in Rapid Development Zones in the activity sectors definedin this Section benefit for a period of five tax years from an investment tax
credit equal to 20% of the total investment realized, deductible from the
Corporate Income Tax (IRPC) payable but which shall not exceed the tax
otherwise payable.
2. In the case of taxpayers subject to Personal Income Tax (IRPS) the tax credit
referred to in the previous paragraph shall not exceed the amount of tax resulting
from income from the activity that is the beneficiary of the incentive and whichis income classified as second category income(as defined in the IRPS Code).

3. Any portion of the tax credit not used in the respective tax year may be carriedforward and used in the five successive tax years dating from the date ofcommencement of investment for projects currently in operation and thecommencement of operations for new projects.

Article 44(Additional Benefits)
Investments defined in this section benefit from the benefits provided for inarticless 18 and 19 of this Code.

SECTION IX
Industrial Free Zones
Article 45(Customs Duty and Value Added Tax Exemption)
1. Operators of Industrial Free Zones benefit from an exemption from paymentof customs duties on the import of construction materials, machinery, equipment,
accompanying spare and accessory parts and other goods used in the carryingout of the licensed Industrial Free Zones activity.
2. Industrial Free Zones enterprises benefit from an exemption from customs
duties on the import of goods and merchandise to be used in the implementationof projects and exploration of activities which have been authorised under theterms of the Industrial Free Zones Regulations.
3. The exemption referred to in paragraphs 1 and 2 of this article includes VAT
both on the import and on internal acquisitions as provided for in the VAT
Code.

Article 46(Income Tax)
1. From the date of the issuance of the respective Certificate, Industrial Free
Zones Developers and enterprises benefit from the following incentives withrespect to Corporate Income Tax (IRPC):a) IRPC exemption in the first ten tax years;b) a 50% reduction in the rate of IRPC tax from the 11th to the 15th tax year;c) a 25% reduction in the rate of IRPC for the remaining life of the project.

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2. Isolated Free Zone enterprises approved in accordance with the terms of theFree Zone Regulations benefit from the following incentives with respect toCorporate Income Tax (IRPC):a) IRPC exemption in the first five tax years;b) a 50% reduction in the rate of IRPC tax from the 6th to the 10th tax year;c) a 25% reduction in the rate of IRPC for the remaining life of the project.

SECTION X
Special Economic Zones
Article 47(Customs Duty and Value Added Tax Exemption)
1. Special Economic Zones Developers and Enterprises benefit from an exemption
from payment of customs duties on the import of construction materials,
machinery, equipment, accompanying spare and accessory parts and othergoods used in the carrying out of the licensed Special Economic Zones activity.

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2. The exemption referred to in paragraph 1 of this article includes VAT both on
the import and on internal acquisitions as provided for in the VAT Code.

Article 48(Income Tax)
1. From the date of the issuance of the respective Certificate, Special Economic
Zones Developers benefit from the following incentives with respect to Corporate
Income Tax (IRPC):a) IRPC exemption in the first five tax years;b) a 50% reduction in the rate of IRPC from the 6th to the 10th tax year;c) a 25% reduction in the rate of IRPC for the remaining life of the project.
2. From the date of the issuance of the respective Certificate, Special Economic
Zone enterprises benefit from the following incentives with respect to Corporate
Income Tax (IRPC):a) IRPC exemption in the first three tax years;b) a 50% reduction in the rate of IRPC from the 4th to the 10th tax year;c) a 25% reduction in the rate of IRPC from the 11th to the 15th tax year.
3. Special Economic Zone enterprises approved in accordance with the terms of
the Special Economic Zone Regulations benefit from a 50% reduction in therate of IRPC tax for a period of five tax years.

CHAPTER III
Sanctions
Article 49(Sanctions which preclude, suspend or cancel Fiscal benefits)
1. Without prejudice to other sanctions permitted under the tax and customs
legislation in force, the violation of the provisions of this Code is subject tothe application of sanctions which may, depending on the gravity of theinfraction, preclude, suspend or cancel the application of the fiscal benefits.
2. The failure to comply with one or more of the prerequisites provided for in
Article 8 of this Code is an infraction subject to the sanction of preclusionfrom the enjoyment of the benefits.
3. Infractions subject to the sanction of suspension of benefits, are:a) the failure to pay taxes that are due to the State Treasury, provided that thisinfraction occurs only once;b) the failure to deliver the declaration required under Article 2.3 of this Code;c) the commission of infraction of a fiscal nature and other infractions, provided
that under the terms of the applicable legislation are not considered to be grave;d) non-compliance with the terms imposed in the grant of the fiscal benefits.
4. The repeated commission of the infractions referred to in the preceding
paragraph shall be subject to the sanction of cancellation, without prejudice
to the terms of Law 2/2006, of 22 March.

Article 50(Cancellation and suspension of fiscal benefits)
1. The enjoyment of fiscal benefits shall expire at the end of the period of time
for which granted, when cancelled as a sanction or if subject to terms andconditions, when a resolutive condition occurs or the beneficiary fails to comply
with the obligations imposed by these terms and conditions.
2. The cancellation or suspension of fiscal benefits results in the automatic
application of general taxation as provided for by law.
3. In the event of the application of a suspensive sanction, the suspension shallremain in force until the complete remedying of the cause of the suspension,
including the payment within a period of sixty days counting from the date of
the notification of tax due by the competent services.
4. The holders of a right to fiscal benefits are obliged to declare, within a period of 30 days
thereof, when the factual or legal basis for the fiscal benefit has ended including thesuspension of fiscal benefits but excluding where the termination was officially known.

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CHAPTER IV
Miscellaneous
Article 51(General transitory regime)
1. The fiscal benefits the right to which has been acquired or the application forwhich has been formulated and submitted on the basis of prior Codes of Fiscal
Benefits, approved by Decree 12/93, of 21 July, and Decree 16/2002, of 27
June, prior to the entry into force of this Code on 1 January 2009 shall bemaintained in accordance with the terms on which granted.
2. Investment projects submitted for analysis and approval prior to the entry into
force of this Code on 1 January 2009, shall be reviewed and decided inaccordance with the terms of the Code of Fiscal Benefits approved by Decree
16/2002, of 27 June, except where the proponents expressly choose and request
the application of this Code, within the maximum time period of sixty days
from date of this Code's entry into force.

Article 52(Disposal of assets subject to fiscal benefits)

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When the fiscal benefit applies to the acquisition of assets to be directly applied in therealisation of the buyer's objectives, if the assets are disposed of or applied to anotherpurpose, without obtaining the prior authorisation of the competent authority, the fiscal
benefit will be null and void, without prejudice to any other sanctions.

Article 53(Supplementary rules)
The provisions of the Corporate Income Tax Code, the Personal Income Tax Code,the Value Added Tax Code, the Customs Dispute Procedures, the Tax Dispute
Procedures, the Tax Executions Code and other applicable legislation shall apply
to any omission in this Code unless contradicted by the provisions of this Code.

Article 54(Entry into force)
This Law enters into force on 1 January 2009.
Approved by the Assembly of the Republic on 26 December 2008.
The President of the Assembly of the Republic, Eduardo Joaquim Mulémbwè.
Promulgated on 1 January 2009.
Let it be published.
The President of the Republic, ARMANDO EMÍLIO GUEBUZA.

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